Correlation Between Golden Matrix and East Africa
Can any of the company-specific risk be diversified away by investing in both Golden Matrix and East Africa 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 Matrix and East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Matrix Group and East Africa Metals, you can compare the effects of market volatilities on Golden Matrix and East Africa 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 Matrix with a short position of East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Matrix and East Africa.
Diversification Opportunities for Golden Matrix and East Africa
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and East is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals and Golden Matrix 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 Matrix Group are associated (or correlated) with East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of Golden Matrix i.e., Golden Matrix and East Africa go up and down completely randomly.
Pair Corralation between Golden Matrix and East Africa
Given the investment horizon of 90 days Golden Matrix is expected to generate 10.68 times less return on investment than East Africa. But when comparing it to its historical volatility, Golden Matrix Group is 6.46 times less risky than East Africa. It trades about 0.04 of its potential returns per unit of risk. East Africa Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8.22 in East Africa Metals on August 26, 2024 and sell it today you would earn a total of 2.78 from holding East Africa Metals or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Matrix Group vs. East Africa Metals
Performance |
| Timeline |
| Golden Matrix Group |
| East Africa Metals |
Golden Matrix and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Matrix and East Africa
The main advantage of trading using opposite Golden Matrix and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Matrix position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's long position.| Golden Matrix vs. AEye Inc | Golden Matrix vs. Arqit Quantum Warrants | Golden Matrix vs. Xos Equity Warrants |
| East Africa vs. Ascendant Resources | East Africa vs. Cantex Mine Development | East Africa vs. Amarc Resources | East Africa vs. Sterling Metals Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |