Correlation Between Gold Fields and Galiano Gold
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Galiano Gold 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 Galiano Gold 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 Galiano Gold, you can compare the effects of market volatilities on Gold Fields and Galiano Gold 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 Galiano Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Galiano Gold.
Diversification Opportunities for Gold Fields and Galiano Gold
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Galiano is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Galiano Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galiano 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 Galiano Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galiano Gold has no effect on the direction of Gold Fields i.e., Gold Fields and Galiano Gold go up and down completely randomly.
Pair Corralation between Gold Fields and Galiano Gold
Considering the 90-day investment horizon Gold Fields is expected to generate 8.39 times less return on investment than Galiano Gold. But when comparing it to its historical volatility, Gold Fields Ltd is 1.24 times less risky than Galiano Gold. It trades about 0.01 of its potential returns per unit of risk. Galiano Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Galiano Gold on August 31, 2024 and sell it today you would earn a total of 83.00 from holding Galiano Gold or generate 143.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Galiano Gold
Performance |
| Timeline |
| Gold Fields |
| Galiano Gold |
Gold Fields and Galiano Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Galiano Gold
The main advantage of trading using opposite Gold Fields and Galiano Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Galiano Gold 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 Galiano Gold will offset losses from the drop in Galiano Gold'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 |
| Galiano Gold vs. Avino Silver Gold | Galiano Gold vs. Americas Silver Corp | Galiano Gold vs. Paramount Gold Nevada | Galiano Gold vs. Fury Gold Mines |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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