Correlation Between Gold Fields and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy, you can compare the effects of market volatilities on Gold Fields and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Hemisphere Energy.
Diversification Opportunities for Gold Fields and Hemisphere Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gold and Hemisphere is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Hemisphere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy has no effect on the direction of Gold Fields i.e., Gold Fields and Hemisphere Energy go up and down completely randomly.
Pair Corralation between Gold Fields and Hemisphere Energy
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.29 times more return on investment than Hemisphere Energy. However, Gold Fields is 1.29 times more volatile than Hemisphere Energy. It trades about 0.45 of its potential returns per unit of risk. Hemisphere Energy is currently generating about 0.06 per unit of risk. If you would invest 1,339 in Gold Fields Ltd on October 23, 2024 and sell it today you would earn a total of 243.00 from holding Gold Fields Ltd or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Hemisphere Energy
Performance |
| Timeline |
| Gold Fields |
| Hemisphere Energy |
Gold Fields and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Hemisphere Energy
The main advantage of trading using opposite Gold Fields and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy'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 |
| Hemisphere Energy vs. Agnico Eagle Mines | Hemisphere Energy vs. Osisko Gold Ro | Hemisphere Energy vs. Gold Fields Ltd | Hemisphere Energy vs. AngloGold Ashanti plc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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