Correlation Between Axon Enterprise and Golden Lake
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise and Golden Lake 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 Axon Enterprise and Golden Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and Golden Lake Exploration, you can compare the effects of market volatilities on Axon Enterprise and Golden Lake 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 Axon Enterprise with a short position of Golden Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and Golden Lake.
Diversification Opportunities for Axon Enterprise and Golden Lake
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axon and Golden is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise and Golden Lake Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Lake Exploration and Axon Enterprise 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 Axon Enterprise are associated (or correlated) with Golden Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Lake Exploration has no effect on the direction of Axon Enterprise i.e., Axon Enterprise and Golden Lake go up and down completely randomly.
Pair Corralation between Axon Enterprise and Golden Lake
Given the investment horizon of 90 days Axon Enterprise is expected to under-perform the Golden Lake. But the stock apears to be less risky and, when comparing its historical volatility, Axon Enterprise is 1.79 times less risky than Golden Lake. The stock trades about -0.17 of its potential returns per unit of risk. The Golden Lake Exploration is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2.83 in Golden Lake Exploration on November 27, 2024 and sell it today you would earn a total of 1.79 from holding Golden Lake Exploration or generate 63.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axon Enterprise vs. Golden Lake Exploration
Performance |
| Timeline |
| Axon Enterprise |
| Golden Lake Exploration |
Axon Enterprise and Golden Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axon Enterprise and Golden Lake
The main advantage of trading using opposite Axon Enterprise and Golden Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise position performs unexpectedly, Golden Lake 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 Golden Lake will offset losses from the drop in Golden Lake's long position.| Axon Enterprise vs. Novocure | Axon Enterprise vs. HubSpot | Axon Enterprise vs. DigitalOcean Holdings | Axon Enterprise vs. Appian Corp |
| Golden Lake vs. Prime Meridian Resources | Golden Lake vs. Macmahon Holdings Limited | Golden Lake vs. Rokmaster Resources Corp | Golden Lake vs. Hudson Resources |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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