Correlation Between Ferrexpo PLC and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Golden Metal 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 Ferrexpo PLC and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Golden Metal Resources, you can compare the effects of market volatilities on Ferrexpo PLC and Golden Metal 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 Ferrexpo PLC with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Golden Metal.
Diversification Opportunities for Ferrexpo PLC and Golden Metal
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ferrexpo and Golden is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Golden Metal go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Golden Metal
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.57 times more return on investment than Golden Metal. However, Ferrexpo PLC is 1.57 times more volatile than Golden Metal Resources. It trades about 0.14 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.21 per unit of risk. If you would invest 6,730 in Ferrexpo PLC on August 31, 2024 and sell it today you would earn a total of 1,480 from holding Ferrexpo PLC or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ferrexpo PLC vs. Golden Metal Resources
Performance |
| Timeline |
| Ferrexpo PLC |
| Golden Metal Resources |
Ferrexpo PLC and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Golden Metal
The main advantage of trading using opposite Ferrexpo PLC and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Golden Metal 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 Metal will offset losses from the drop in Golden Metal's long position.| Ferrexpo PLC vs. Centamin PLC | Ferrexpo PLC vs. Central Asia Metals | Ferrexpo PLC vs. Anglo Asian Mining | Ferrexpo PLC vs. Metals Exploration Plc |
| Golden Metal vs. Bankers Investment Trust | Golden Metal vs. Oakley Capital Investments | Golden Metal vs. Federal Realty Investment | Golden Metal vs. New Residential Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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