Correlation Between Gold Fields and Clicks
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Clicks 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 Gold Fields and Clicks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields and Clicks, you can compare the effects of market volatilities on Gold Fields and Clicks 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 Gold Fields with a short position of Clicks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Clicks.
Diversification Opportunities for Gold Fields and Clicks
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and Clicks is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields and Clicks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clicks and Gold Fields 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 Gold Fields are associated (or correlated) with Clicks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clicks has no effect on the direction of Gold Fields i.e., Gold Fields and Clicks go up and down completely randomly.
Pair Corralation between Gold Fields and Clicks
Assuming the 90 days trading horizon Gold Fields is expected to generate 2.65 times more return on investment than Clicks. However, Gold Fields is 2.65 times more volatile than Clicks. It trades about 0.36 of its potential returns per unit of risk. Clicks is currently generating about -0.15 per unit of risk. If you would invest 2,477,000 in Gold Fields on October 23, 2024 and sell it today you would earn a total of 399,900 from holding Gold Fields or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Gold Fields vs. Clicks
Performance |
| Timeline |
| Gold Fields |
| Clicks |
Gold Fields and Clicks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Clicks
The main advantage of trading using opposite Gold Fields and Clicks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Clicks 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 Clicks will offset losses from the drop in Clicks' long position.| Gold Fields vs. E Media Holdings | Gold Fields vs. Kumba Iron Ore | Gold Fields vs. Brimstone Investment | Gold Fields vs. Bytes Technology |
| Clicks vs. MC Mining | Clicks vs. Blue Label Telecoms | Clicks vs. Kumba Iron Ore | Clicks vs. Deneb Investments |
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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