Correlation Between CAP LEASE and GoldMining
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and GoldMining 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 CAP LEASE and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and GoldMining, you can compare the effects of market volatilities on CAP LEASE and GoldMining 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 CAP LEASE with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and GoldMining.
Diversification Opportunities for CAP LEASE and GoldMining
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAP and GoldMining is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of CAP LEASE i.e., CAP LEASE and GoldMining go up and down completely randomly.
Pair Corralation between CAP LEASE and GoldMining
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 0.63 times more return on investment than GoldMining. However, CAP LEASE AVIATION is 1.58 times less risky than GoldMining. It trades about -0.05 of its potential returns per unit of risk. GoldMining is currently generating about -0.13 per unit of risk. If you would invest 53.00 in CAP LEASE AVIATION on October 26, 2024 and sell it today you would lose (3.00) from holding CAP LEASE AVIATION or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 67.21% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. GoldMining
Performance |
| Timeline |
| CAP LEASE AVIATION |
| GoldMining |
CAP LEASE and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and GoldMining
The main advantage of trading using opposite CAP LEASE and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Ferrexpo PLC | CAP LEASE vs. Atalaya Mining |
| GoldMining vs. Berkshire Hathaway | GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Chocoladefabriken Lindt Spruengli |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |