Correlation Between Gold Road and KBC Group
Can any of the company-specific risk be diversified away by investing in both Gold Road and KBC Group 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 KBC Group 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 KBC Group NV, you can compare the effects of market volatilities on Gold Road and KBC Group 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 KBC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and KBC Group.
Diversification Opportunities for Gold Road and KBC Group
Very weak diversification
The 3 months correlation between Gold and KBC is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and KBC Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Group NV 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 KBC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Group NV has no effect on the direction of Gold Road i.e., Gold Road and KBC Group go up and down completely randomly.
Pair Corralation between Gold Road and KBC Group
Assuming the 90 days horizon Gold Road Resources is expected to generate 1.96 times more return on investment than KBC Group. However, Gold Road is 1.96 times more volatile than KBC Group NV. It trades about 0.03 of its potential returns per unit of risk. KBC Group NV is currently generating about 0.04 per unit of risk. If you would invest 108.00 in Gold Road Resources on October 16, 2024 and sell it today you would earn a total of 21.00 from holding Gold Road Resources or generate 19.44% 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. KBC Group NV
Performance |
| Timeline |
| Gold Road Resources |
| KBC Group NV |
Gold Road and KBC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and KBC Group
The main advantage of trading using opposite Gold Road and KBC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, KBC Group 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 KBC Group will offset losses from the drop in KBC Group's long position.| Gold Road vs. Fuji Media Holdings | Gold Road vs. Clean Energy Fuels | Gold Road vs. Live Nation Entertainment | Gold Road vs. GigaMedia |
| KBC Group vs. BNP Paribas SA | KBC Group vs. BNP PARIBAS ADR | KBC Group vs. Intesa Sanpaolo SpA | KBC Group vs. Lloyds Banking Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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