Correlation Between Enel SpA and Golden Star
Can any of the company-specific risk be diversified away by investing in both Enel SpA 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 Enel SpA and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enel SpA and Golden Star Resource, you can compare the effects of market volatilities on Enel SpA 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 Enel SpA with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel SpA and Golden Star.
Diversification Opportunities for Enel SpA and Golden Star
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enel and Golden is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Enel SpA 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 Enel SpA 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 Enel SpA 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 Enel SpA i.e., Enel SpA and Golden Star go up and down completely randomly.
Pair Corralation between Enel SpA and Golden Star
Assuming the 90 days horizon Enel SpA is expected to generate 3.33 times less return on investment than Golden Star. But when comparing it to its historical volatility, Enel SpA is 5.48 times less risky than Golden Star. It trades about 0.05 of its potential returns per unit of risk. 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 | Insignificant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Enel SpA vs. Golden Star Resource
Performance |
| Timeline |
| Enel SpA |
| Golden Star Resource |
Enel SpA and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel SpA and Golden Star
The main advantage of trading using opposite Enel SpA and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel SpA 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.The idea behind Enel SpA and Golden Star Resource pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |