Correlation Between Gold Fields and Vior
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Vior 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 Vior 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 Vior Inc, you can compare the effects of market volatilities on Gold Fields and Vior 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 Vior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Vior.
Diversification Opportunities for Gold Fields and Vior
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Vior is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Vior Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vior Inc 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 Vior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vior Inc has no effect on the direction of Gold Fields i.e., Gold Fields and Vior go up and down completely randomly.
Pair Corralation between Gold Fields and Vior
Considering the 90-day investment horizon Gold Fields is expected to generate 4.77 times less return on investment than Vior. But when comparing it to its historical volatility, Gold Fields Ltd is 1.89 times less risky than Vior. It trades about 0.02 of its potential returns per unit of risk. Vior Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Vior Inc on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Vior Inc or generate 33.33% 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. Vior Inc
Performance |
| Timeline |
| Gold Fields |
| Vior Inc |
Gold Fields and Vior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Vior
The main advantage of trading using opposite Gold Fields and Vior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Vior 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 Vior will offset losses from the drop in Vior'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 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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