Correlation Between Gold Road and SIEMENS HEALTH
Can any of the company-specific risk be diversified away by investing in both Gold Road and SIEMENS HEALTH 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 SIEMENS HEALTH 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 SIEMENS HEALTH ADR050, you can compare the effects of market volatilities on Gold Road and SIEMENS HEALTH 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 SIEMENS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and SIEMENS HEALTH.
Diversification Opportunities for Gold Road and SIEMENS HEALTH
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gold and SIEMENS is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and SIEMENS HEALTH ADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS HEALTH ADR050 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 SIEMENS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS HEALTH ADR050 has no effect on the direction of Gold Road i.e., Gold Road and SIEMENS HEALTH go up and down completely randomly.
Pair Corralation between Gold Road and SIEMENS HEALTH
Assuming the 90 days horizon Gold Road Resources is expected to generate 1.49 times more return on investment than SIEMENS HEALTH. However, Gold Road is 1.49 times more volatile than SIEMENS HEALTH ADR050. It trades about 0.29 of its potential returns per unit of risk. SIEMENS HEALTH ADR050 is currently generating about -0.01 per unit of risk. If you would invest 110.00 in Gold Road Resources on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Gold Road Resources or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. SIEMENS HEALTH ADR050
Performance |
| Timeline |
| Gold Road Resources |
| SIEMENS HEALTH ADR050 |
Gold Road and SIEMENS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and SIEMENS HEALTH
The main advantage of trading using opposite Gold Road and SIEMENS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, SIEMENS HEALTH 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 SIEMENS HEALTH will offset losses from the drop in SIEMENS HEALTH'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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