Correlation Between Golden Metal and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Ocean Harvest 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 Ocean Harvest 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 Ocean Harvest Technology, you can compare the effects of market volatilities on Golden Metal and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Ocean Harvest.
Diversification Opportunities for Golden Metal and Ocean Harvest
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Ocean is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of Golden Metal i.e., Golden Metal and Ocean Harvest go up and down completely randomly.
Pair Corralation between Golden Metal and Ocean Harvest
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 1.27 times more return on investment than Ocean Harvest. However, Golden Metal is 1.27 times more volatile than Ocean Harvest Technology. It trades about 0.07 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.22 per unit of risk. If you would invest 3,100 in Golden Metal Resources on November 3, 2024 and sell it today you would earn a total of 200.00 from holding Golden Metal Resources or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Ocean Harvest Technology
Performance |
| Timeline |
| Golden Metal Resources |
| Ocean Harvest Technology |
Golden Metal and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Ocean Harvest
The main advantage of trading using opposite Golden Metal and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.| Golden Metal vs. Edinburgh Investment Trust | Golden Metal vs. Molson Coors Beverage | Golden Metal vs. Seraphim Space Investment | Golden Metal vs. Diversified Energy |
| Ocean Harvest vs. Bytes Technology | Ocean Harvest vs. Sartorius Stedim Biotech | Ocean Harvest vs. Beowulf Mining | Ocean Harvest vs. Coeur 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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