Correlation Between GOLD ROAD and JINS HOLDINGS
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and JINS HOLDINGS 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 GOLD ROAD and JINS HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and JINS HOLDINGS INC, you can compare the effects of market volatilities on GOLD ROAD and JINS HOLDINGS 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 GOLD ROAD with a short position of JINS HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and JINS HOLDINGS.
Diversification Opportunities for GOLD ROAD and JINS HOLDINGS
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOLD and JINS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and JINS HOLDINGS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JINS HOLDINGS INC and GOLD ROAD 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 GOLD ROAD RES are associated (or correlated) with JINS HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JINS HOLDINGS INC has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and JINS HOLDINGS go up and down completely randomly.
Pair Corralation between GOLD ROAD and JINS HOLDINGS
Assuming the 90 days trading horizon GOLD ROAD is expected to generate 1.04 times less return on investment than JINS HOLDINGS. But when comparing it to its historical volatility, GOLD ROAD RES is 1.21 times less risky than JINS HOLDINGS. It trades about 0.09 of its potential returns per unit of risk. JINS HOLDINGS INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,620 in JINS HOLDINGS INC on October 25, 2024 and sell it today you would earn a total of 1,320 from holding JINS HOLDINGS INC or generate 50.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. JINS HOLDINGS INC
Performance |
| Timeline |
| GOLD ROAD RES |
| JINS HOLDINGS INC |
GOLD ROAD and JINS HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and JINS HOLDINGS
The main advantage of trading using opposite GOLD ROAD and JINS HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, JINS HOLDINGS 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 JINS HOLDINGS will offset losses from the drop in JINS HOLDINGS's long position.The idea behind GOLD ROAD RES and JINS HOLDINGS INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| JINS HOLDINGS vs. SBM OFFSHORE | JINS HOLDINGS vs. EMBARK EDUCATION LTD | JINS HOLDINGS vs. EIDESVIK OFFSHORE NK | JINS HOLDINGS vs. Strategic Education |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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