Correlation Between Corporate Travel and Gold Road
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and Gold Road at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Corporate Travel and Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and Gold Road Resources, you can compare the effects of market volatilities on Corporate Travel and Gold Road and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Corporate Travel with a short position of Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and Gold Road.
Diversification Opportunities for Corporate Travel and Gold Road
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Corporate and Gold is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources and Corporate Travel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Corporate Travel Management are associated (or correlated) with Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Corporate Travel i.e., Corporate Travel and Gold Road go up and down completely randomly.
Pair Corralation between Corporate Travel and Gold Road
Assuming the 90 days trading horizon Corporate Travel is expected to generate 26.1 times less return on investment than Gold Road. But when comparing it to its historical volatility, Corporate Travel Management is 1.73 times less risky than Gold Road. It trades about 0.03 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Gold Road Resources on September 15, 2024 and sell it today you would earn a total of 24.00 from holding Gold Road Resources or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. Gold Road Resources
Performance |
| Timeline |
| Corporate Travel Man |
| Gold Road Resources |
Corporate Travel and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and Gold Road
The main advantage of trading using opposite Corporate Travel and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, Gold Road can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gold Road will offset losses from the drop in Gold Road's long position.| Corporate Travel vs. Check Point Software | Corporate Travel vs. Casio Computer CoLtd | Corporate Travel vs. Gaztransport Technigaz SA | Corporate Travel vs. Transportadora de Gas |
| Gold Road vs. Coor Service Management | Gold Road vs. United Airlines Holdings | Gold Road vs. Corporate Travel Management | Gold Road vs. Waste Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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