Correlation Between Guild Esports and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Guild Esports and Golden Metal 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 Guild Esports and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guild Esports Plc and Golden Metal Resources, you can compare the effects of market volatilities on Guild Esports and Golden Metal 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 Guild Esports with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Esports and Golden Metal.
Diversification Opportunities for Guild Esports and Golden Metal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guild and Golden is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Guild Esports Plc and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Guild Esports 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 Guild Esports Plc are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Guild Esports i.e., Guild Esports and Golden Metal go up and down completely randomly.
Pair Corralation between Guild Esports and Golden Metal
Assuming the 90 days trading horizon Guild Esports Plc is expected to generate 2.58 times more return on investment than Golden Metal. However, Guild Esports is 2.58 times more volatile than Golden Metal Resources. It trades about 0.21 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.08 per unit of risk. If you would invest 3.10 in Guild Esports Plc on October 30, 2024 and sell it today you would earn a total of 1.90 from holding Guild Esports Plc or generate 61.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guild Esports Plc vs. Golden Metal Resources
Performance |
| Timeline |
| Guild Esports Plc |
| Golden Metal Resources |
Guild Esports and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Esports and Golden Metal
The main advantage of trading using opposite Guild Esports and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Esports position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Guild Esports vs. Spotify Technology SA | Guild Esports vs. Aptitude Software Group | Guild Esports vs. Nordic Semiconductor ASA | Guild Esports vs. Global Net Lease |
| Golden Metal vs. Givaudan SA | Golden Metal vs. Atalaya Mining | Golden Metal vs. Central Asia Metals | Golden Metal vs. Metals Exploration 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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