Correlation Between Cleveland Cliffs and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Cleveland Cliffs and Gold Fields 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 Cleveland Cliffs and Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleveland Cliffs and Gold Fields Ltd, you can compare the effects of market volatilities on Cleveland Cliffs and Gold Fields 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 Cleveland Cliffs with a short position of Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleveland Cliffs and Gold Fields.
Diversification Opportunities for Cleveland Cliffs and Gold Fields
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cleveland and Gold is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland Cliffs and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Cleveland Cliffs 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 Cleveland Cliffs are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Cleveland Cliffs i.e., Cleveland Cliffs and Gold Fields go up and down completely randomly.
Pair Corralation between Cleveland Cliffs and Gold Fields
Considering the 90-day investment horizon Cleveland Cliffs is expected to generate 1.91 times more return on investment than Gold Fields. However, Cleveland Cliffs is 1.91 times more volatile than Gold Fields Ltd. It trades about -0.07 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.23 per unit of risk. If you would invest 1,372 in Cleveland Cliffs on August 30, 2024 and sell it today you would lose (158.00) from holding Cleveland Cliffs or give up 11.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleveland Cliffs vs. Gold Fields Ltd
Performance |
| Timeline |
| Cleveland Cliffs |
| Gold Fields |
Cleveland Cliffs and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleveland Cliffs and Gold Fields
The main advantage of trading using opposite Cleveland Cliffs and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleveland Cliffs position performs unexpectedly, Gold Fields 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 Gold Fields will offset losses from the drop in Gold Fields' long position.| Cleveland Cliffs vs. Nucor Corp | Cleveland Cliffs vs. Steel Dynamics | Cleveland Cliffs vs. ArcelorMittal SA ADR | Cleveland Cliffs vs. Gerdau SA ADR |
| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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