Correlation Between GOLD ROAD and Transport International
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and Transport International 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 Transport International 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 Transport International Holdings, you can compare the effects of market volatilities on GOLD ROAD and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Transport International.
Diversification Opportunities for GOLD ROAD and Transport International
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOLD and Transport is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and Transport International go up and down completely randomly.
Pair Corralation between GOLD ROAD and Transport International
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.57 times more return on investment than Transport International. However, GOLD ROAD is 1.57 times more volatile than Transport International Holdings. It trades about 0.82 of its potential returns per unit of risk. Transport International Holdings is currently generating about -0.14 per unit of risk. If you would invest 122.00 in GOLD ROAD RES on October 28, 2024 and sell it today you would earn a total of 26.00 from holding GOLD ROAD RES or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. Transport International Holdin
Performance |
| Timeline |
| GOLD ROAD RES |
| Transport International |
GOLD ROAD and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Transport International
The main advantage of trading using opposite GOLD ROAD and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.| GOLD ROAD vs. ZURICH INSURANCE GROUP | GOLD ROAD vs. EPSILON HEALTHCARE LTD | GOLD ROAD vs. Japan Post Insurance | GOLD ROAD vs. Cardinal Health |
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 CEOs Directory module to screen CEOs from public companies around the world.
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