Correlation Between Golden Metal and Macerich
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Macerich 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 Macerich 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 Macerich Co, you can compare the effects of market volatilities on Golden Metal and Macerich 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 Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Macerich.
Diversification Opportunities for Golden Metal and Macerich
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Macerich is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Macerich Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich 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 Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Golden Metal i.e., Golden Metal and Macerich go up and down completely randomly.
Pair Corralation between Golden Metal and Macerich
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 2.93 times more return on investment than Macerich. However, Golden Metal is 2.93 times more volatile than Macerich Co. It trades about 0.16 of its potential returns per unit of risk. Macerich Co is currently generating about 0.19 per unit of risk. If you would invest 2,500 in Golden Metal Resources on September 13, 2024 and sell it today you would earn a total of 450.00 from holding Golden Metal Resources or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Macerich Co
Performance |
| Timeline |
| Golden Metal Resources |
| Macerich |
Golden Metal and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Macerich
The main advantage of trading using opposite Golden Metal and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Golden Metal vs. Spotify Technology SA | Golden Metal vs. Darden Restaurants | Golden Metal vs. GoldMining | Golden Metal vs. Vitec Software Group |
| Macerich vs. Sovereign Metals | Macerich vs. Wheaton Precious Metals | Macerich vs. Golden Metal Resources | Macerich vs. Europa Metals |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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