Correlation Between Golden Metal and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Schweiter Technologies 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 Schweiter Technologies 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 Schweiter Technologies AG, you can compare the effects of market volatilities on Golden Metal and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Schweiter Technologies.
Diversification Opportunities for Golden Metal and Schweiter Technologies
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Schweiter is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Golden Metal i.e., Golden Metal and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Golden Metal and Schweiter Technologies
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 2.96 times more return on investment than Schweiter Technologies. However, Golden Metal is 2.96 times more volatile than Schweiter Technologies AG. It trades about 0.16 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.04 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Schweiter Technologies AG
Performance |
| Timeline |
| Golden Metal Resources |
| Schweiter Technologies |
Golden Metal and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Schweiter Technologies
The main advantage of trading using opposite Golden Metal and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Golden Metal vs. Spotify Technology SA | Golden Metal vs. Darden Restaurants | Golden Metal vs. GoldMining | Golden Metal vs. Vitec Software Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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