Correlation Between GoldMining and GoldMoney
Can any of the company-specific risk be diversified away by investing in both GoldMining and GoldMoney 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 GoldMining and GoldMoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and GoldMoney, you can compare the effects of market volatilities on GoldMining and GoldMoney 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 GoldMining with a short position of GoldMoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and GoldMoney.
Diversification Opportunities for GoldMining and GoldMoney
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoldMining and GoldMoney is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and GoldMoney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMoney and GoldMining 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 GoldMining are associated (or correlated) with GoldMoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMoney has no effect on the direction of GoldMining i.e., GoldMining and GoldMoney go up and down completely randomly.
Pair Corralation between GoldMining and GoldMoney
Assuming the 90 days trading horizon GoldMining is expected to under-perform the GoldMoney. In addition to that, GoldMining is 1.32 times more volatile than GoldMoney. It trades about -0.11 of its total potential returns per unit of risk. GoldMoney is currently generating about 0.37 per unit of volatility. If you would invest 535.00 in GoldMoney on November 3, 2024 and sell it today you would earn a total of 55.00 from holding GoldMoney or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GoldMining vs. GoldMoney
Performance |
| Timeline |
| GoldMining |
| GoldMoney |
GoldMining and GoldMoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and GoldMoney
The main advantage of trading using opposite GoldMining and GoldMoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, GoldMoney 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 GoldMoney will offset losses from the drop in GoldMoney's long position.| GoldMining vs. First Mining Gold | GoldMining vs. Liberty Gold Corp | GoldMining vs. Equinox Gold Corp | GoldMining vs. SilverCrest Metals |
| GoldMoney vs. GoldMoney | GoldMoney vs. Mene Inc | GoldMoney vs. North Peak Resources | GoldMoney vs. First Mining Gold |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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