Correlation Between Gold Fields and Suncor Energy
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Suncor 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 Suncor 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 Suncor Energy, you can compare the effects of market volatilities on Gold Fields and Suncor 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 Suncor Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Suncor Energy.
Diversification Opportunities for Gold Fields and Suncor Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gold and Suncor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Suncor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncor 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 Suncor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncor Energy has no effect on the direction of Gold Fields i.e., Gold Fields and Suncor Energy go up and down completely randomly.
Pair Corralation between Gold Fields and Suncor Energy
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.65 times more return on investment than Suncor Energy. However, Gold Fields is 1.65 times more volatile than Suncor Energy. It trades about 0.04 of its potential returns per unit of risk. Suncor Energy is currently generating about 0.05 per unit of risk. If you would invest 1,027 in Gold Fields Ltd on August 24, 2024 and sell it today you would earn a total of 499.00 from holding Gold Fields Ltd or generate 48.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Suncor Energy
Performance |
| Timeline |
| Gold Fields |
| Suncor Energy |
Gold Fields and Suncor Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Suncor Energy
The main advantage of trading using opposite Gold Fields and Suncor Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Suncor 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 Suncor Energy will offset losses from the drop in Suncor 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 |
| Suncor Energy vs. Eshallgo Class A | Suncor Energy vs. Amtech Systems | Suncor Energy vs. Gold Fields Ltd | Suncor Energy vs. Aegean Airlines SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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