Correlation Between Gold Fields and Black Tusk
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Black Tusk 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 Black Tusk 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 Black Tusk Resources, you can compare the effects of market volatilities on Gold Fields and Black Tusk 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 Black Tusk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Black Tusk.
Diversification Opportunities for Gold Fields and Black Tusk
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and Black is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Black Tusk Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Tusk Resources 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 Black Tusk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Tusk Resources has no effect on the direction of Gold Fields i.e., Gold Fields and Black Tusk go up and down completely randomly.
Pair Corralation between Gold Fields and Black Tusk
Considering the 90-day investment horizon Gold Fields is expected to generate 7952.3 times less return on investment than Black Tusk. But when comparing it to its historical volatility, Gold Fields Ltd is 125.41 times less risky than Black Tusk. It trades about 0.01 of its potential returns per unit of risk. Black Tusk Resources is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 3.46 in Black Tusk Resources on August 29, 2024 and sell it today you would earn a total of 3.54 from holding Black Tusk Resources or generate 102.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.08% |
| Values | Daily Returns |
Gold Fields Ltd vs. Black Tusk Resources
Performance |
| Timeline |
| Gold Fields |
| Black Tusk Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Gold Fields and Black Tusk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Black Tusk
The main advantage of trading using opposite Gold Fields and Black Tusk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Black Tusk 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 Black Tusk will offset losses from the drop in Black Tusk's long position.The idea behind Gold Fields Ltd and Black Tusk Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Black Tusk vs. Palamina Corp | Black Tusk vs. Gold Springs Resource | Black Tusk vs. BTU Metals Corp | Black Tusk vs. Norsemont Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |