Correlation Between Bread Financial and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Bread Financial and Gold Fields 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 Bread Financial and Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and Gold Fields Limited, you can compare the effects of market volatilities on Bread Financial and Gold Fields 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 Bread Financial with a short position of Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and Gold Fields.
Diversification Opportunities for Bread Financial and Gold Fields
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bread and Gold is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and Gold Fields Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields Limited and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields Limited has no effect on the direction of Bread Financial i.e., Bread Financial and Gold Fields go up and down completely randomly.
Pair Corralation between Bread Financial and Gold Fields
Assuming the 90 days trading horizon Bread Financial Holdings is expected to under-perform the Gold Fields. But the stock apears to be less risky and, when comparing its historical volatility, Bread Financial Holdings is 1.06 times less risky than Gold Fields. The stock trades about -0.02 of its potential returns per unit of risk. The Gold Fields Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,312 in Gold Fields Limited on October 20, 2024 and sell it today you would earn a total of 289.00 from holding Gold Fields Limited or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. Gold Fields Limited
Performance |
| Timeline |
| Bread Financial Holdings |
| Gold Fields Limited |
Bread Financial and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and Gold Fields
The main advantage of trading using opposite Bread Financial and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, Gold Fields 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 Fields will offset losses from the drop in Gold Fields' long position.| Bread Financial vs. CRISPR Therapeutics AG | Bread Financial vs. Verizon Communications | Bread Financial vs. Fresenius Medical Care | Bread Financial vs. Unifique Telecomunicaes SA |
| Gold Fields vs. Taiwan Semiconductor Manufacturing | Gold Fields vs. Synchrony Financial | Gold Fields vs. Air Products and | Gold Fields vs. HDFC Bank Limited |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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