Correlation Between Gold Fields and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Advanced Micro 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 Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Advanced Micro Devices, you can compare the effects of market volatilities on Gold Fields and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Advanced Micro.
Diversification Opportunities for Gold Fields and Advanced Micro
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gold and Advanced is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Ltd are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Gold Fields i.e., Gold Fields and Advanced Micro go up and down completely randomly.
Pair Corralation between Gold Fields and Advanced Micro
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Advanced Micro. But the stock apears to be less risky and, when comparing its historical volatility, Gold Fields Ltd is 1.01 times less risky than Advanced Micro. The stock trades about -0.23 of its potential returns per unit of risk. The Advanced Micro Devices is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 15,992 in Advanced Micro Devices on August 28, 2024 and sell it today you would lose (1,879) from holding Advanced Micro Devices or give up 11.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Advanced Micro Devices
Performance |
| Timeline |
| Gold Fields |
| Advanced Micro Devices |
Gold Fields and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Advanced Micro
The main advantage of trading using opposite Gold Fields and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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