Correlation Between Gold Fields and Trinseo SA
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Trinseo SA 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 Trinseo SA 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 Trinseo SA, you can compare the effects of market volatilities on Gold Fields and Trinseo SA 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 Trinseo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Trinseo SA.
Diversification Opportunities for Gold Fields and Trinseo SA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gold and Trinseo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Trinseo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinseo SA 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 Trinseo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinseo SA has no effect on the direction of Gold Fields i.e., Gold Fields and Trinseo SA go up and down completely randomly.
Pair Corralation between Gold Fields and Trinseo SA
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 0.62 times more return on investment than Trinseo SA. However, Gold Fields Ltd is 1.61 times less risky than Trinseo SA. It trades about -0.23 of its potential returns per unit of risk. Trinseo SA is currently generating about -0.29 per unit of risk. If you would invest 1,795 in Gold Fields Ltd on August 24, 2024 and sell it today you would lose (271.00) from holding Gold Fields Ltd or give up 15.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Trinseo SA
Performance |
| Timeline |
| Gold Fields |
| Trinseo SA |
Gold Fields and Trinseo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Trinseo SA
The main advantage of trading using opposite Gold Fields and Trinseo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Trinseo SA 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 Trinseo SA will offset losses from the drop in Trinseo SA'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 |
| Trinseo SA vs. Eshallgo Class A | Trinseo SA vs. Amtech Systems | Trinseo SA vs. Gold Fields Ltd | Trinseo SA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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