Correlation Between H-FARM SPA and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both H-FARM SPA 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 H-FARM SPA and GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and GOLD ROAD RES, you can compare the effects of market volatilities on H-FARM SPA 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 H-FARM SPA with a short position of GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of H-FARM SPA and GOLD ROAD.
Diversification Opportunities for H-FARM SPA and GOLD ROAD
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between H-FARM and GOLD is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES and H-FARM SPA 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 H FARM SPA 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 RES has no effect on the direction of H-FARM SPA i.e., H-FARM SPA and GOLD ROAD go up and down completely randomly.
Pair Corralation between H-FARM SPA and GOLD ROAD
Assuming the 90 days horizon H FARM SPA is expected to generate 10.44 times more return on investment than GOLD ROAD. However, H-FARM SPA is 10.44 times more volatile than GOLD ROAD RES. It trades about 0.1 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.84 per unit of risk. If you would invest 12.00 in H FARM SPA on October 22, 2024 and sell it today you would earn a total of 1.00 from holding H FARM SPA or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. GOLD ROAD RES
Performance |
| Timeline |
| H FARM SPA |
| GOLD ROAD RES |
H-FARM SPA and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H-FARM SPA and GOLD ROAD
The main advantage of trading using opposite H-FARM SPA and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H-FARM SPA 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.| H-FARM SPA vs. AGF Management Limited | H-FARM SPA vs. Platinum Investment Management | H-FARM SPA vs. Waste Management | H-FARM SPA vs. USWE SPORTS AB |
| GOLD ROAD vs. ELECTRONIC ARTS | GOLD ROAD vs. KIMBALL ELECTRONICS | GOLD ROAD vs. Fevertree Drinks PLC | GOLD ROAD vs. SAN MIGUEL BREWERY |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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