Correlation Between Gold Fields and Blue Star
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Blue Star 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 Blue Star 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 Blue Star Gold, you can compare the effects of market volatilities on Gold Fields and Blue Star 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 Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Blue Star.
Diversification Opportunities for Gold Fields and Blue Star
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gold and Blue is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Blue Star Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Gold 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 Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Gold has no effect on the direction of Gold Fields i.e., Gold Fields and Blue Star go up and down completely randomly.
Pair Corralation between Gold Fields and Blue Star
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Blue Star. In addition to that, Gold Fields is 5.58 times more volatile than Blue Star Gold. It trades about -0.19 of its total potential returns per unit of risk. Blue Star Gold is currently generating about -0.21 per unit of volatility. If you would invest 3.58 in Blue Star Gold on September 1, 2024 and sell it today you would lose (0.09) from holding Blue Star Gold or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gold Fields Ltd vs. Blue Star Gold
Performance |
| Timeline |
| Gold Fields |
| Blue Star Gold |
Gold Fields and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Blue Star
The main advantage of trading using opposite Gold Fields and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Blue Star 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 Blue Star will offset losses from the drop in Blue Star'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 |
| Blue Star vs. Argo Gold | Blue Star vs. Minnova Corp | Blue Star vs. Angkor Resources Corp | Blue Star vs. Advance United Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |