Correlation Between EJF Investments and Greatland Gold
Can any of the company-specific risk be diversified away by investing in both EJF Investments and Greatland Gold 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 EJF Investments and Greatland Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Greatland Gold plc, you can compare the effects of market volatilities on EJF Investments and Greatland Gold 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 EJF Investments with a short position of Greatland Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Greatland Gold.
Diversification Opportunities for EJF Investments and Greatland Gold
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between EJF and Greatland is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Greatland Gold plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatland Gold plc and EJF Investments 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 EJF Investments are associated (or correlated) with Greatland Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatland Gold plc has no effect on the direction of EJF Investments i.e., EJF Investments and Greatland Gold go up and down completely randomly.
Pair Corralation between EJF Investments and Greatland Gold
Assuming the 90 days trading horizon EJF Investments is expected to under-perform the Greatland Gold. But the stock apears to be less risky and, when comparing its historical volatility, EJF Investments is 2.44 times less risky than Greatland Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Greatland Gold plc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Greatland Gold plc on November 3, 2024 and sell it today you would earn a total of 138.00 from holding Greatland Gold plc or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EJF Investments vs. Greatland Gold plc
Performance |
| Timeline |
| EJF Investments |
| Greatland Gold plc |
EJF Investments and Greatland Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Greatland Gold
The main advantage of trading using opposite EJF Investments and Greatland Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, Greatland Gold 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 Greatland Gold will offset losses from the drop in Greatland Gold's long position.| EJF Investments vs. Eastinco Mining Exploration | EJF Investments vs. Fulcrum Metals PLC | EJF Investments vs. Cornish Metals | EJF Investments vs. Wheaton Precious Metals |
| Greatland Gold vs. AcadeMedia AB | Greatland Gold vs. Prosiebensat 1 Media | Greatland Gold vs. Grand Vision Media | Greatland Gold vs. MediaZest plc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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