Correlation Between Golden Metal and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement VE, you can compare the effects of market volatilities on Golden Metal and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Veolia Environnement.
Diversification Opportunities for Golden Metal and Veolia Environnement
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Veolia is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Golden Metal i.e., Golden Metal and Veolia Environnement go up and down completely randomly.
Pair Corralation between Golden Metal and Veolia Environnement
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 3.96 times more return on investment than Veolia Environnement. However, Golden Metal is 3.96 times more volatile than Veolia Environnement VE. It trades about 0.13 of its potential returns per unit of risk. Veolia Environnement VE is currently generating about 0.0 per unit of risk. If you would invest 925.00 in Golden Metal Resources on October 26, 2024 and sell it today you would earn a total of 2,625 from holding Golden Metal Resources or generate 283.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Veolia Environnement VE
Performance |
| Timeline |
| Golden Metal Resources |
| Veolia Environnement |
Golden Metal and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Veolia Environnement
The main advantage of trading using opposite Golden Metal and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Golden Metal vs. Norwegian Air Shuttle | Golden Metal vs. Amedeo Air Four | Golden Metal vs. Finnair Oyj | Golden Metal vs. Fair Oaks Income |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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