Correlation Between Golden Entertainment and North American
Can any of the company-specific risk be diversified away by investing in both Golden Entertainment and North American 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 Golden Entertainment and North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Entertainment and North American Construction, you can compare the effects of market volatilities on Golden Entertainment and North American 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 Golden Entertainment with a short position of North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Entertainment and North American.
Diversification Opportunities for Golden Entertainment and North American
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and North is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Golden Entertainment and North American Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Const and Golden Entertainment 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 Golden Entertainment are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Const has no effect on the direction of Golden Entertainment i.e., Golden Entertainment and North American go up and down completely randomly.
Pair Corralation between Golden Entertainment and North American
Assuming the 90 days horizon Golden Entertainment is expected to generate 0.5 times more return on investment than North American. However, Golden Entertainment is 1.99 times less risky than North American. It trades about 0.15 of its potential returns per unit of risk. North American Construction is currently generating about -0.17 per unit of risk. If you would invest 3,020 in Golden Entertainment on November 3, 2024 and sell it today you would earn a total of 120.00 from holding Golden Entertainment or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Entertainment vs. North American Construction
Performance |
| Timeline |
| Golden Entertainment |
| North American Const |
Golden Entertainment and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Entertainment and North American
The main advantage of trading using opposite Golden Entertainment and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Entertainment position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| Golden Entertainment vs. FIREWEED METALS P | Golden Entertainment vs. SCANSOURCE | Golden Entertainment vs. Singapore Telecommunications Limited | Golden Entertainment vs. ADRIATIC METALS LS 013355 |
| North American vs. ScanSource | North American vs. China National Building | North American vs. Sumitomo Rubber Industries | North American vs. TITANIUM TRANSPORTGROUP |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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