Correlation Between GOLD ROAD and ONEOK
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and ONEOK 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 ONEOK 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 ONEOK Inc, you can compare the effects of market volatilities on GOLD ROAD and ONEOK 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 ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and ONEOK.
Diversification Opportunities for GOLD ROAD and ONEOK
Very weak diversification
The 3 months correlation between GOLD and ONEOK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK 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 ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and ONEOK go up and down completely randomly.
Pair Corralation between GOLD ROAD and ONEOK
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.91 times more return on investment than ONEOK. However, GOLD ROAD is 1.91 times more volatile than ONEOK Inc. It trades about 0.3 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.09 per unit of risk. If you would invest 106.00 in GOLD ROAD RES on September 13, 2024 and sell it today you would earn a total of 22.00 from holding GOLD ROAD RES or generate 20.75% 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. ONEOK Inc
Performance |
| Timeline |
| GOLD ROAD RES |
| ONEOK Inc |
GOLD ROAD and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and ONEOK
The main advantage of trading using opposite GOLD ROAD and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.The idea behind GOLD ROAD RES and ONEOK 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.| ONEOK vs. Casio Computer CoLtd | ONEOK vs. PKSHA TECHNOLOGY INC | ONEOK vs. Amkor Technology | ONEOK vs. Check Point Software |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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