Correlation Between Biome Technologies and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Biome Technologies and Golden Metal 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 Biome Technologies and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biome Technologies Plc and Golden Metal Resources, you can compare the effects of market volatilities on Biome Technologies and Golden Metal 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 Biome Technologies with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biome Technologies and Golden Metal.
Diversification Opportunities for Biome Technologies and Golden Metal
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biome and Golden is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Biome Technologies Plc and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Biome Technologies 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 Biome Technologies Plc are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Biome Technologies i.e., Biome Technologies and Golden Metal go up and down completely randomly.
Pair Corralation between Biome Technologies and Golden Metal
Assuming the 90 days trading horizon Biome Technologies Plc is expected to under-perform the Golden Metal. But the stock apears to be less risky and, when comparing its historical volatility, Biome Technologies Plc is 1.0 times less risky than Golden Metal. The stock trades about -0.43 of its potential returns per unit of risk. The Golden Metal Resources is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,800 in Golden Metal Resources on October 23, 2024 and sell it today you would earn a total of 400.00 from holding Golden Metal Resources or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Biome Technologies Plc vs. Golden Metal Resources
Performance |
| Timeline |
| Biome Technologies Plc |
| Golden Metal Resources |
Biome Technologies and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biome Technologies and Golden Metal
The main advantage of trading using opposite Biome Technologies and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biome Technologies position performs unexpectedly, Golden Metal 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 Metal will offset losses from the drop in Golden Metal's long position.| Biome Technologies vs. Givaudan SA | Biome Technologies vs. Antofagasta PLC | Biome Technologies vs. Ferrexpo PLC | Biome Technologies vs. Atalaya Mining |
| Golden Metal vs. BlackRock Frontiers Investment | Golden Metal vs. Bankers Investment Trust | Golden Metal vs. Software Circle plc | Golden Metal vs. Smithson Investment Trust |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |