Correlation Between GOLD ROAD and H-FARM SPA
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and H-FARM SPA 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 H-FARM SPA 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 H FARM SPA, you can compare the effects of market volatilities on GOLD ROAD and H-FARM SPA 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 H-FARM SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and H-FARM SPA.
Diversification Opportunities for GOLD ROAD and H-FARM SPA
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GOLD and H-FARM is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA 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 H-FARM SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and H-FARM SPA go up and down completely randomly.
Pair Corralation between GOLD ROAD and H-FARM SPA
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.23 times more return on investment than H-FARM SPA. However, GOLD ROAD RES is 4.3 times less risky than H-FARM SPA. It trades about 0.38 of its potential returns per unit of risk. H FARM SPA is currently generating about -0.08 per unit of risk. If you would invest 126.00 in GOLD ROAD RES on November 6, 2024 and sell it today you would earn a total of 20.00 from holding GOLD ROAD RES or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. H FARM SPA
Performance |
| Timeline |
| GOLD ROAD RES |
| H FARM SPA |
GOLD ROAD and H-FARM SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and H-FARM SPA
The main advantage of trading using opposite GOLD ROAD and H-FARM SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, H-FARM SPA 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 H-FARM SPA will offset losses from the drop in H-FARM SPA's long position.| GOLD ROAD vs. Motorcar Parts of | GOLD ROAD vs. MAGNUM MINING EXP | GOLD ROAD vs. Commercial Vehicle Group | GOLD ROAD vs. CARSALESCOM |
| H-FARM SPA vs. American Homes 4 | H-FARM SPA vs. The Home Depot | H-FARM SPA vs. PLAYTIKA HOLDING DL 01 | H-FARM SPA vs. CENTURIA OFFICE REIT |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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