Correlation Between Bankers Investment and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Golden Metal Resources, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Golden Metal.
Diversification Opportunities for Bankers Investment and Golden Metal
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bankers and Golden is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust 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 Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and Golden Metal go up and down completely randomly.
Pair Corralation between Bankers Investment and Golden Metal
Assuming the 90 days trading horizon Bankers Investment is expected to generate 2.04 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Bankers Investment Trust is 3.58 times less risky than Golden Metal. It trades about 0.03 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,300 in Golden Metal Resources on November 29, 2024 and sell it today you would earn a total of 0.00 from holding Golden Metal Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Golden Metal Resources
Performance |
| Timeline |
| Bankers Investment Trust |
| Golden Metal Resources |
Bankers Investment and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Golden Metal
The main advantage of trading using opposite Bankers Investment and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Brunner Investment Trust | Bankers Investment vs. Schroder Asian Alpha | Bankers Investment vs. Artemisome I | Bankers Investment vs. iShares Continental European |
| Golden Metal vs. Bigblu Broadband PLC | Golden Metal vs. Wheaton Precious Metals | Golden Metal vs. Critical Metals Plc | Golden Metal vs. Kaufman Et Broad |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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