Correlation Between Golden Metal and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Ferrexpo PLC 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 Ferrexpo PLC 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 Ferrexpo PLC, you can compare the effects of market volatilities on Golden Metal and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Ferrexpo PLC.
Diversification Opportunities for Golden Metal and Ferrexpo PLC
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Ferrexpo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Golden Metal i.e., Golden Metal and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Golden Metal and Ferrexpo PLC
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 0.51 times more return on investment than Ferrexpo PLC. However, Golden Metal Resources is 1.95 times less risky than Ferrexpo PLC. It trades about 0.26 of its potential returns per unit of risk. Ferrexpo PLC is currently generating about 0.11 per unit of risk. If you would invest 2,860 in Golden Metal Resources on October 20, 2024 and sell it today you would earn a total of 340.00 from holding Golden Metal Resources or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Ferrexpo PLC
Performance |
| Timeline |
| Golden Metal Resources |
| Ferrexpo PLC |
Golden Metal and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Ferrexpo PLC
The main advantage of trading using opposite Golden Metal and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Golden Metal vs. Raymond James Financial | Golden Metal vs. Metro Bank PLC | Golden Metal vs. Synchrony Financial | Golden Metal vs. Tetragon Financial Group |
| Ferrexpo PLC vs. First Class Metals | Ferrexpo PLC vs. Eastinco Mining Exploration | Ferrexpo PLC vs. Golden Metal Resources | Ferrexpo PLC vs. Metals Exploration Plc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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