Correlation Between EDP Energias and Golden Star
Can any of the company-specific risk be diversified away by investing in both EDP Energias and Golden Star 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 EDP Energias and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDP Energias de and Golden Star Resource, you can compare the effects of market volatilities on EDP Energias and Golden Star 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 EDP Energias with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDP Energias and Golden Star.
Diversification Opportunities for EDP Energias and Golden Star
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDP and Golden is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding EDP Energias de and Golden Star Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Resource and EDP Energias 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 EDP Energias de are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Resource has no effect on the direction of EDP Energias i.e., EDP Energias and Golden Star go up and down completely randomly.
Pair Corralation between EDP Energias and Golden Star
Assuming the 90 days horizon EDP Energias de is expected to under-perform the Golden Star. But the pink sheet apears to be less risky and, when comparing its historical volatility, EDP Energias de is 7.86 times less risky than Golden Star. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Golden Star Resource is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Golden Star Resource on September 12, 2024 and sell it today you would lose (105.00) from holding Golden Star Resource or give up 47.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
EDP Energias de vs. Golden Star Resource
Performance |
| Timeline |
| EDP Energias de |
| Golden Star Resource |
EDP Energias and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDP Energias and Golden Star
The main advantage of trading using opposite EDP Energias and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDP Energias position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star's long position.| EDP Energias vs. Atco | EDP Energias vs. Canadian Utilities Limited | EDP Energias vs. Engie SA ADR | EDP Energias vs. The AES |
| Golden Star vs. Vera Bradley | Golden Star vs. Eastern Co | Golden Star vs. Genfit | Golden Star vs. Abcellera Biologics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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