Correlation Between Gold Fields and Hongli Group
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Hongli Group 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 Hongli Group 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 Hongli Group Ordinary, you can compare the effects of market volatilities on Gold Fields and Hongli Group 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 Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Hongli Group.
Diversification Opportunities for Gold Fields and Hongli Group
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and Hongli is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary 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 Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of Gold Fields i.e., Gold Fields and Hongli Group go up and down completely randomly.
Pair Corralation between Gold Fields and Hongli Group
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 0.38 times more return on investment than Hongli Group. However, Gold Fields Ltd is 2.66 times less risky than Hongli Group. It trades about 0.05 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about 0.01 per unit of risk. If you would invest 986.00 in Gold Fields Ltd on November 1, 2024 and sell it today you would earn a total of 747.00 from holding Gold Fields Ltd or generate 75.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.32% |
| Values | Daily Returns |
Gold Fields Ltd vs. Hongli Group Ordinary
Performance |
| Timeline |
| Gold Fields |
| Hongli Group Ordinary |
Gold Fields and Hongli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Hongli Group
The main advantage of trading using opposite Gold Fields and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Hongli Group 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 Hongli Group will offset losses from the drop in Hongli Group'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 |
| Hongli Group vs. EMCOR Group | Hongli Group vs. Sonida Senior Living | Hongli Group vs. Tandem Diabetes Care | Hongli Group vs. Xtant Medical 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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