Correlation Between Golden Metal and Masco Corp
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Masco Corp 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 Masco Corp 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 Masco Corp, you can compare the effects of market volatilities on Golden Metal and Masco Corp 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 Masco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Masco Corp.
Diversification Opportunities for Golden Metal and Masco Corp
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Masco is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Masco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masco Corp 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 Masco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masco Corp has no effect on the direction of Golden Metal i.e., Golden Metal and Masco Corp go up and down completely randomly.
Pair Corralation between Golden Metal and Masco Corp
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 3.05 times more return on investment than Masco Corp. However, Golden Metal is 3.05 times more volatile than Masco Corp. It trades about 0.13 of its potential returns per unit of risk. Masco Corp is currently generating about 0.08 per unit of risk. If you would invest 775.00 in Golden Metal Resources on September 14, 2024 and sell it today you would earn a total of 2,225 from holding Golden Metal Resources or generate 287.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.52% |
| Values | Daily Returns |
Golden Metal Resources vs. Masco Corp
Performance |
| Timeline |
| Golden Metal Resources |
| Masco Corp |
Golden Metal and Masco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Masco Corp
The main advantage of trading using opposite Golden Metal and Masco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Masco Corp 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 Masco Corp will offset losses from the drop in Masco Corp's long position.| Golden Metal vs. Givaudan SA | Golden Metal vs. Antofagasta PLC | Golden Metal vs. Ferrexpo PLC | Golden Metal vs. Atalaya Mining |
| Masco Corp vs. Deltex Medical Group | Masco Corp vs. Empire Metals Limited | Masco Corp vs. Odfjell Drilling | Masco Corp vs. Golden Metal Resources |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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