Correlation Between Gold Fields and Brinker International
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Brinker International 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 Brinker International 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 Brinker International, you can compare the effects of market volatilities on Gold Fields and Brinker International 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 Brinker International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Brinker International.
Diversification Opportunities for Gold Fields and Brinker International
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gold and Brinker is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International 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 Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of Gold Fields i.e., Gold Fields and Brinker International go up and down completely randomly.
Pair Corralation between Gold Fields and Brinker International
Considering the 90-day investment horizon Gold Fields is expected to generate 2.47 times less return on investment than Brinker International. In addition to that, Gold Fields is 1.18 times more volatile than Brinker International. It trades about 0.04 of its total potential returns per unit of risk. Brinker International is currently generating about 0.12 per unit of volatility. If you would invest 3,256 in Brinker International on August 24, 2024 and sell it today you would earn a total of 9,306 from holding Brinker International or generate 285.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Brinker International
Performance |
| Timeline |
| Gold Fields |
| Brinker International |
Gold Fields and Brinker International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Brinker International
The main advantage of trading using opposite Gold Fields and Brinker International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Brinker International 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 Brinker International will offset losses from the drop in Brinker International'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 |
| Brinker International vs. Chipotle Mexican Grill | Brinker International vs. Eshallgo Class A | Brinker International vs. Amtech Systems | Brinker International vs. Gold Fields Ltd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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