Correlation Between Golden Metal and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals, you can compare the effects of market volatilities on Golden Metal and Adriatic Metals 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 Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Adriatic Metals.
Diversification Opportunities for Golden Metal and Adriatic Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Adriatic is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Adriatic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals 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 Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals has no effect on the direction of Golden Metal i.e., Golden Metal and Adriatic Metals go up and down completely randomly.
Pair Corralation between Golden Metal and Adriatic Metals
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 1.96 times more return on investment than Adriatic Metals. However, Golden Metal is 1.96 times more volatile than Adriatic Metals. It trades about 0.19 of its potential returns per unit of risk. Adriatic Metals is currently generating about -0.03 per unit of risk. If you would invest 2,480 in Golden Metal Resources on August 31, 2024 and sell it today you would earn a total of 570.00 from holding Golden Metal Resources or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Adriatic Metals
Performance |
| Timeline |
| Golden Metal Resources |
| Adriatic Metals |
Golden Metal and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Adriatic Metals
The main advantage of trading using opposite Golden Metal and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| Golden Metal vs. Liontrust Asset Management | Golden Metal vs. CompuGroup Medical AG | Golden Metal vs. Creo Medical Group | Golden Metal vs. Advanced Medical Solutions |
| Adriatic Metals vs. AfriTin Mining | Adriatic Metals vs. Zegona Communications Plc | Adriatic Metals vs. Batm Advanced Communications | Adriatic Metals vs. Eastinco Mining Exploration |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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