Correlation Between Elray Resources and Gold
Can any of the company-specific risk be diversified away by investing in both Elray Resources and 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 Elray Resources and Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elray Resources and Gold And Gemstone, you can compare the effects of market volatilities on Elray Resources and 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 Elray Resources with a short position of Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elray Resources and Gold.
Diversification Opportunities for Elray Resources and Gold
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elray and Gold is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Elray Resources and Gold And Gemstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Gemstone and Elray Resources 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 Elray Resources are associated (or correlated) with Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Gemstone has no effect on the direction of Elray Resources i.e., Elray Resources and Gold go up and down completely randomly.
Pair Corralation between Elray Resources and Gold
Given the investment horizon of 90 days Elray Resources is expected to under-perform the Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Elray Resources is 1.44 times less risky than Gold. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Gold And Gemstone is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 0.08 in Gold And Gemstone on August 31, 2024 and sell it today you would lose (0.03) from holding Gold And Gemstone or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elray Resources vs. Gold And Gemstone
Performance |
| Timeline |
| Elray Resources |
| Gold And Gemstone |
Elray Resources and Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elray Resources and Gold
The main advantage of trading using opposite Elray Resources and Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elray Resources position performs unexpectedly, 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 Gold will offset losses from the drop in Gold's long position.| Elray Resources vs. Accel Entertainment | Elray Resources vs. Light Wonder | Elray Resources vs. Everi Holdings | Elray Resources vs. Inspired Entertainment |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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