Correlation Between Golden Metal and Europa Metals
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Europa 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 Europa 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 Europa Metals, you can compare the effects of market volatilities on Golden Metal and Europa 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 Europa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Europa Metals.
Diversification Opportunities for Golden Metal and Europa Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Golden and Europa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Europa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europa 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 Europa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europa Metals has no effect on the direction of Golden Metal i.e., Golden Metal and Europa Metals go up and down completely randomly.
Pair Corralation between Golden Metal and Europa Metals
If you would invest 2,500 in Golden Metal Resources on September 12, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Golden Metal Resources vs. Europa Metals
Performance |
| Timeline |
| Golden Metal Resources |
| Europa Metals |
Golden Metal and Europa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Europa Metals
The main advantage of trading using opposite Golden Metal and Europa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Europa 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 Europa Metals will offset losses from the drop in Europa Metals' long position.| Golden Metal vs. Givaudan SA | Golden Metal vs. Antofagasta PLC | Golden Metal vs. Ferrexpo PLC | Golden Metal vs. Atalaya Mining |
| Europa Metals vs. Givaudan SA | Europa Metals vs. Antofagasta PLC | Europa Metals vs. Ferrexpo PLC | Europa Metals vs. Atalaya 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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