Correlation Between Gold Fields and Elemental Royalties
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Elemental Royalties 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 Elemental Royalties 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 Elemental Royalties Corp, you can compare the effects of market volatilities on Gold Fields and Elemental Royalties 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 Elemental Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Elemental Royalties.
Diversification Opportunities for Gold Fields and Elemental Royalties
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gold and Elemental is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Elemental Royalties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elemental Royalties Corp 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 Elemental Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elemental Royalties Corp has no effect on the direction of Gold Fields i.e., Gold Fields and Elemental Royalties go up and down completely randomly.
Pair Corralation between Gold Fields and Elemental Royalties
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.23 times more return on investment than Elemental Royalties. However, Gold Fields is 1.23 times more volatile than Elemental Royalties Corp. It trades about 0.04 of its potential returns per unit of risk. Elemental Royalties Corp is currently generating about 0.0 per unit of risk. If you would invest 1,018 in Gold Fields Ltd on August 30, 2024 and sell it today you would earn a total of 438.00 from holding Gold Fields Ltd or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Elemental Royalties Corp
Performance |
| Timeline |
| Gold Fields |
| Elemental Royalties Corp |
Gold Fields and Elemental Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Elemental Royalties
The main advantage of trading using opposite Gold Fields and Elemental Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Elemental Royalties 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 Elemental Royalties will offset losses from the drop in Elemental Royalties' long position.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| Elemental Royalties vs. Quebec Precious Metals | Elemental Royalties vs. Omineca Mining and | Elemental Royalties vs. Bluestone Resources | Elemental Royalties vs. Aurelius Minerals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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