Correlation Between GOLD ROAD and China Overseas
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and China Overseas 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 China Overseas 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 China Overseas Land, you can compare the effects of market volatilities on GOLD ROAD and China Overseas 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 China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and China Overseas.
Diversification Opportunities for GOLD ROAD and China Overseas
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLD and China is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land 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 China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and China Overseas go up and down completely randomly.
Pair Corralation between GOLD ROAD and China Overseas
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.86 times more return on investment than China Overseas. However, GOLD ROAD RES is 1.16 times less risky than China Overseas. It trades about 0.45 of its potential returns per unit of risk. China Overseas Land is currently generating about -0.05 per unit of risk. If you would invest 122.00 in GOLD ROAD RES on November 3, 2024 and sell it today you would earn a total of 24.00 from holding GOLD ROAD RES or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. China Overseas Land
Performance |
| Timeline |
| GOLD ROAD RES |
| China Overseas Land |
GOLD ROAD and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and China Overseas
The main advantage of trading using opposite GOLD ROAD and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| GOLD ROAD vs. PLAYTIKA HOLDING DL 01 | GOLD ROAD vs. TITANIUM TRANSPORTGROUP | GOLD ROAD vs. TRAVEL LEISURE DL 01 | GOLD ROAD vs. TEXAS ROADHOUSE |
| China Overseas vs. Penn National Gaming | China Overseas vs. FRACTAL GAMING GROUP | China Overseas vs. PURETECH HEALTH PLC | China Overseas vs. Media and Games |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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