Correlation Between BSF Enterprise and Golden Metal
Can any of the company-specific risk be diversified away by investing in both BSF Enterprise 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 BSF Enterprise and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSF Enterprise Plc and Golden Metal Resources, you can compare the effects of market volatilities on BSF Enterprise 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 BSF Enterprise with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSF Enterprise and Golden Metal.
Diversification Opportunities for BSF Enterprise and Golden Metal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BSF and Golden is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BSF Enterprise 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 BSF 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 BSF Enterprise 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 BSF Enterprise i.e., BSF Enterprise and Golden Metal go up and down completely randomly.
Pair Corralation between BSF Enterprise and Golden Metal
Assuming the 90 days trading horizon BSF Enterprise Plc is expected to under-perform the Golden Metal. In addition to that, BSF Enterprise is 1.05 times more volatile than Golden Metal Resources. It trades about -0.19 of its total potential returns per unit of risk. Golden Metal Resources is currently generating about 0.21 per unit of volatility. If you would invest 2,600 in Golden Metal Resources on August 27, 2024 and sell it today you would earn a total of 600.00 from holding Golden Metal Resources or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSF Enterprise Plc vs. Golden Metal Resources
Performance |
| Timeline |
| BSF Enterprise Plc |
| Golden Metal Resources |
BSF Enterprise and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSF Enterprise and Golden Metal
The main advantage of trading using opposite BSF Enterprise and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSF Enterprise 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.| BSF Enterprise vs. Golden Metal Resources | BSF Enterprise vs. Litigation Capital Management | BSF Enterprise vs. Science in Sport | BSF Enterprise vs. AMG Advanced Metallurgical |
| Golden Metal vs. Regions Financial Corp | Golden Metal vs. Panther Metals PLC | Golden Metal vs. Adriatic Metals | Golden Metal vs. Ally Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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