Correlation Between GoldMining and United States
Can any of the company-specific risk be diversified away by investing in both GoldMining and United States 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 GoldMining and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and United States Steel, you can compare the effects of market volatilities on GoldMining and United States 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 GoldMining with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and United States.
Diversification Opportunities for GoldMining and United States
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoldMining and United is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and GoldMining 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 GoldMining are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of GoldMining i.e., GoldMining and United States go up and down completely randomly.
Pair Corralation between GoldMining and United States
Given the investment horizon of 90 days GoldMining is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, GoldMining is 1.23 times less risky than United States. The stock trades about 0.0 of its potential returns per unit of risk. The United States Steel is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,217 in United States Steel on September 1, 2024 and sell it today you would earn a total of 1,860 from holding United States Steel or generate 83.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoldMining vs. United States Steel
Performance |
| Timeline |
| GoldMining |
| United States Steel |
GoldMining and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and United States
The main advantage of trading using opposite GoldMining and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| GoldMining vs. Gold Royalty Corp | GoldMining vs. Uranium Royalty Corp | GoldMining vs. Metalla Royalty Streaming | GoldMining vs. Equinox Gold Corp |
| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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