Correlation Between Golden Metal and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Abingdon Health 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 Abingdon Health 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 Abingdon Health Plc, you can compare the effects of market volatilities on Golden Metal and Abingdon Health 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Abingdon Health.
Diversification Opportunities for Golden Metal and Abingdon Health
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Abingdon is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Golden Metal i.e., Golden Metal and Abingdon Health go up and down completely randomly.
Pair Corralation between Golden Metal and Abingdon Health
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 9.89 times more return on investment than Abingdon Health. However, Golden Metal is 9.89 times more volatile than Abingdon Health Plc. It trades about 0.06 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about 0.04 per unit of risk. If you would invest 9.00 in Golden Metal Resources on September 2, 2024 and sell it today you would earn a total of 3,041 from holding Golden Metal Resources or generate 33788.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.36% |
| Values | Daily Returns |
Golden Metal Resources vs. Abingdon Health Plc
Performance |
| Timeline |
| Golden Metal Resources |
| Abingdon Health Plc |
Golden Metal and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Abingdon Health
The main advantage of trading using opposite Golden Metal and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Golden Metal vs. Fevertree Drinks Plc | Golden Metal vs. Ion Beam Applications | Golden Metal vs. Fidelity National Information | Golden Metal vs. Batm Advanced Communications |
| Abingdon Health vs. McEwen Mining | Abingdon Health vs. Dentsply Sirona | Abingdon Health vs. Baker Steel Resources | Abingdon Health vs. Blackrock World Mining |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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