Correlation Between Golden Metal and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Marstons 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 Marstons 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 Marstons PLC, you can compare the effects of market volatilities on Golden Metal and Marstons 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 Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Marstons PLC.
Diversification Opportunities for Golden Metal and Marstons PLC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Golden and Marstons is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons 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 Marstons PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marstons PLC has no effect on the direction of Golden Metal i.e., Golden Metal and Marstons PLC go up and down completely randomly.
Pair Corralation between Golden Metal and Marstons PLC
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 1.39 times more return on investment than Marstons PLC. However, Golden Metal is 1.39 times more volatile than Marstons PLC. It trades about 0.06 of its potential returns per unit of risk. Marstons PLC is currently generating about -0.14 per unit of risk. If you would invest 3,200 in Golden Metal Resources on November 6, 2024 and sell it today you would earn a total of 100.00 from holding Golden Metal Resources or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Marstons PLC
Performance |
| Timeline |
| Golden Metal Resources |
| Marstons PLC |
Golden Metal and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Marstons PLC
The main advantage of trading using opposite Golden Metal and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Marstons 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 Marstons PLC will offset losses from the drop in Marstons PLC's long position.| Golden Metal vs. Auto Trader Group | Golden Metal vs. Qurate Retail Series | Golden Metal vs. Eastman Chemical Co | Golden Metal vs. Air Products Chemicals |
| Marstons PLC vs. Charter Communications Cl | Marstons PLC vs. Cairo Communication SpA | Marstons PLC vs. Mobile Tornado Group | Marstons PLC vs. Universal Music Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |