Correlation Between Constellium and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Constellium 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 Constellium and Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellium Nv and Gold Fields Ltd, you can compare the effects of market volatilities on Constellium 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 Constellium with a short position of Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellium and Gold Fields.
Diversification Opportunities for Constellium and Gold Fields
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Constellium and Gold is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Constellium Nv and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Constellium 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 Constellium Nv 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 Constellium i.e., Constellium and Gold Fields go up and down completely randomly.
Pair Corralation between Constellium and Gold Fields
Given the investment horizon of 90 days Constellium Nv is expected to generate 0.69 times more return on investment than Gold Fields. However, Constellium Nv is 1.46 times less risky than Gold Fields. It trades about 0.16 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 1,141 in Constellium Nv on August 30, 2024 and sell it today you would earn a total of 84.00 from holding Constellium Nv or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellium Nv vs. Gold Fields Ltd
Performance |
| Timeline |
| Constellium Nv |
| Gold Fields |
Constellium and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellium and Gold Fields
The main advantage of trading using opposite Constellium and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellium 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.| Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Norsk Hydro ASA |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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