Correlation Between Gold Road and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both Gold Road and Churchill Downs 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 Churchill Downs 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 Churchill Downs Incorporated, you can compare the effects of market volatilities on Gold Road and Churchill Downs 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 Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Churchill Downs.
Diversification Opportunities for Gold Road and Churchill Downs
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gold and Churchill is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs 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 Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Gold Road i.e., Gold Road and Churchill Downs go up and down completely randomly.
Pair Corralation between Gold Road and Churchill Downs
Assuming the 90 days horizon Gold Road Resources is expected to generate 2.02 times more return on investment than Churchill Downs. However, Gold Road is 2.02 times more volatile than Churchill Downs Incorporated. It trades about 0.37 of its potential returns per unit of risk. Churchill Downs Incorporated is currently generating about -0.04 per unit of risk. If you would invest 106.00 in Gold Road Resources on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Gold Road Resources or generate 22.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Churchill Downs Incorporated
Performance |
| Timeline |
| Gold Road Resources |
| Churchill Downs |
Gold Road and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Churchill Downs
The main advantage of trading using opposite Gold Road and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' 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 |
| Churchill Downs vs. TRAINLINE PLC LS | Churchill Downs vs. COPLAND ROAD CAPITAL | Churchill Downs vs. Transportadora de Gas | Churchill Downs 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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