Correlation Between Golden Metal and Premier African
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Premier African 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 Premier African 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 Premier African Minerals, you can compare the effects of market volatilities on Golden Metal and Premier African 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 Premier African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Premier African.
Diversification Opportunities for Golden Metal and Premier African
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Premier is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Premier African Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier African Minerals 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 Premier African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier African Minerals has no effect on the direction of Golden Metal i.e., Golden Metal and Premier African go up and down completely randomly.
Pair Corralation between Golden Metal and Premier African
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 6.15 times more return on investment than Premier African. However, Golden Metal is 6.15 times more volatile than Premier African Minerals. It trades about 0.06 of its potential returns per unit of risk. Premier African Minerals is currently generating about -0.02 per unit of risk. If you would invest 9.00 in Golden Metal Resources on September 12, 2024 and sell it today you would earn a total of 2,991 from holding Golden Metal Resources or generate 33233.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.89% |
| Values | Daily Returns |
Golden Metal Resources vs. Premier African Minerals
Performance |
| Timeline |
| Golden Metal Resources |
| Premier African Minerals |
Golden Metal and Premier African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Premier African
The main advantage of trading using opposite Golden Metal and Premier African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Premier African 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 Premier African will offset losses from the drop in Premier African's long position.| Golden Metal vs. Givaudan SA | Golden Metal vs. Antofagasta PLC | Golden Metal vs. Ferrexpo PLC | Golden Metal vs. Atalaya Mining |
| Premier African vs. Check Point Software | Premier African vs. SMA Solar Technology | Premier African vs. PureTech Health plc | Premier African vs. Automatic Data Processing |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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