Correlation Between Golden Metal and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Golden Metal and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Ross Stores.
Diversification Opportunities for Golden Metal and Ross Stores
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Ross is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Golden Metal i.e., Golden Metal and Ross Stores go up and down completely randomly.
Pair Corralation between Golden Metal and Ross Stores
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 2.08 times more return on investment than Ross Stores. However, Golden Metal is 2.08 times more volatile than Ross Stores. It trades about 0.32 of its potential returns per unit of risk. Ross Stores is currently generating about 0.11 per unit of risk. If you would invest 2,800 in Golden Metal Resources on October 23, 2024 and sell it today you would earn a total of 400.00 from holding Golden Metal Resources or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Ross Stores
Performance |
| Timeline |
| Golden Metal Resources |
| Ross Stores |
Golden Metal and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Ross Stores
The main advantage of trading using opposite Golden Metal and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Golden Metal vs. BlackRock Frontiers Investment | Golden Metal vs. Bankers Investment Trust | Golden Metal vs. Software Circle plc | Golden Metal vs. Smithson Investment Trust |
| Ross Stores vs. Take Two Interactive Software | Ross Stores vs. Golden Metal Resources | Ross Stores vs. URU Metals | Ross Stores 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |