Correlation Between Gold Road and BUILDERS FIRSTSOURC
Can any of the company-specific risk be diversified away by investing in both Gold Road and BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and BUILDERS FIRSTSOURC, you can compare the effects of market volatilities on Gold Road and BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and BUILDERS FIRSTSOURC.
Diversification Opportunities for Gold Road and BUILDERS FIRSTSOURC
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and BUILDERS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and BUILDERS FIRSTSOURC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BUILDERS FIRSTSOURC 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 Resources are associated (or correlated) with BUILDERS FIRSTSOURC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BUILDERS FIRSTSOURC has no effect on the direction of Gold Road i.e., Gold Road and BUILDERS FIRSTSOURC go up and down completely randomly.
Pair Corralation between Gold Road and BUILDERS FIRSTSOURC
Assuming the 90 days horizon Gold Road is expected to generate 2.69 times less return on investment than BUILDERS FIRSTSOURC. In addition to that, Gold Road is 1.06 times more volatile than BUILDERS FIRSTSOURC. It trades about 0.03 of its total potential returns per unit of risk. BUILDERS FIRSTSOURC is currently generating about 0.09 per unit of volatility. If you would invest 6,133 in BUILDERS FIRSTSOURC on September 14, 2024 and sell it today you would earn a total of 10,082 from holding BUILDERS FIRSTSOURC or generate 164.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gold Road Resources vs. BUILDERS FIRSTSOURC
Performance |
| Timeline |
| Gold Road Resources |
| BUILDERS FIRSTSOURC |
Gold Road and BUILDERS FIRSTSOURC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and BUILDERS FIRSTSOURC
The main advantage of trading using opposite Gold Road and BUILDERS FIRSTSOURC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC will offset losses from the drop in BUILDERS FIRSTSOURC's long position.| Gold Road vs. Franco Nevada | Gold Road vs. Superior Plus Corp | Gold Road vs. SIVERS SEMICONDUCTORS AB | Gold Road vs. Norsk Hydro ASA |
| BUILDERS FIRSTSOURC vs. Daito Trust Construction | BUILDERS FIRSTSOURC vs. Liberty Broadband | BUILDERS FIRSTSOURC vs. Broadridge Financial Solutions | BUILDERS FIRSTSOURC vs. Gold Road Resources |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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