Correlation Between Golden Metal and Cadence Minerals
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Cadence Minerals 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 Cadence Minerals 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 Cadence Minerals PLC, you can compare the effects of market volatilities on Golden Metal and Cadence Minerals 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 Cadence Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Cadence Minerals.
Diversification Opportunities for Golden Metal and Cadence Minerals
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Cadence is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Cadence Minerals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Minerals 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 Cadence Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Minerals PLC has no effect on the direction of Golden Metal i.e., Golden Metal and Cadence Minerals go up and down completely randomly.
Pair Corralation between Golden Metal and Cadence Minerals
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 10.3 times more return on investment than Cadence Minerals. However, Golden Metal is 10.3 times more volatile than Cadence Minerals PLC. It trades about 0.06 of its potential returns per unit of risk. Cadence Minerals PLC is currently generating about -0.06 per unit of risk. If you would invest 9.00 in Golden Metal Resources on August 27, 2024 and sell it today you would earn a total of 3,191 from holding Golden Metal Resources or generate 35455.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.65% |
| Values | Daily Returns |
Golden Metal Resources vs. Cadence Minerals PLC
Performance |
| Timeline |
| Golden Metal Resources |
| Cadence Minerals PLC |
Golden Metal and Cadence Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Cadence Minerals
The main advantage of trading using opposite Golden Metal and Cadence Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Cadence Minerals 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 Cadence Minerals will offset losses from the drop in Cadence Minerals' long position.| Golden Metal vs. Regions Financial Corp | Golden Metal vs. Panther Metals PLC | Golden Metal vs. Adriatic Metals | Golden Metal vs. Ally Financial |
| Cadence Minerals vs. Empire Metals Limited | Cadence Minerals vs. Blackrock World Mining | Cadence Minerals vs. Silvercorp Metals | Cadence Minerals vs. GoldMining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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