Correlation Between Golden Metal and Extra Space
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Extra Space 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 Golden Metal and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Extra Space Storage, you can compare the effects of market volatilities on Golden Metal and Extra Space 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 Golden Metal with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Extra Space.
Diversification Opportunities for Golden Metal and Extra Space
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Extra is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Extra Space Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extra Space Storage and Golden Metal 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 Golden Metal Resources are associated (or correlated) with Extra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extra Space Storage has no effect on the direction of Golden Metal i.e., Golden Metal and Extra Space go up and down completely randomly.
Pair Corralation between Golden Metal and Extra Space
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 1.42 times more return on investment than Extra Space. However, Golden Metal is 1.42 times more volatile than Extra Space Storage. It trades about 0.16 of its potential returns per unit of risk. Extra Space Storage is currently generating about -0.21 per unit of risk. If you would invest 2,950 in Golden Metal Resources on October 12, 2024 and sell it today you would earn a total of 200.00 from holding Golden Metal Resources or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Extra Space Storage
Performance |
| Timeline |
| Golden Metal Resources |
| Extra Space Storage |
Golden Metal and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Extra Space
The main advantage of trading using opposite Golden Metal and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Extra Space 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 Extra Space will offset losses from the drop in Extra Space's long position.| Golden Metal vs. Givaudan SA | Golden Metal vs. Antofagasta PLC | Golden Metal vs. Ferrexpo PLC | Golden Metal vs. Atalaya Mining |
| Extra Space vs. URU Metals | Extra Space vs. Capital Metals PLC | Extra Space vs. Panther Metals PLC | Extra Space vs. Travel Leisure Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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