Correlation Between Gold Fields and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields and Dow Jones Industrial, you can compare the effects of market volatilities on Gold Fields and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Dow Jones.
Diversification Opportunities for Gold Fields and Dow Jones
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gold and Dow is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Gold Fields i.e., Gold Fields and Dow Jones go up and down completely randomly.
Pair Corralation between Gold Fields and Dow Jones
Assuming the 90 days trading horizon Gold Fields is expected to generate 5.61 times less return on investment than Dow Jones. In addition to that, Gold Fields is 4.29 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Gold Fields vs. Dow Jones Industrial
Performance |
| Timeline |
Gold Fields and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Gold Fields
Pair trading matchups for Gold Fields
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Gold Fields and Dow Jones
The main advantage of trading using opposite Gold Fields and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Gold Fields vs. Sibanye Stillwater | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Pan African Resources |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |