Correlation Between Gold Road and Dug Technology
Can any of the company-specific risk be diversified away by investing in both Gold Road and Dug Technology 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 Gold Road and Dug Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and Dug Technology, you can compare the effects of market volatilities on Gold Road and Dug Technology 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 Gold Road with a short position of Dug Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Dug Technology.
Diversification Opportunities for Gold Road and Dug Technology
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gold and Dug is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug Technology and Gold Road 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 Gold Road Resources are associated (or correlated) with Dug Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology has no effect on the direction of Gold Road i.e., Gold Road and Dug Technology go up and down completely randomly.
Pair Corralation between Gold Road and Dug Technology
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 0.46 times more return on investment than Dug Technology. However, Gold Road Resources is 2.2 times less risky than Dug Technology. It trades about -0.08 of its potential returns per unit of risk. Dug Technology is currently generating about -0.21 per unit of risk. If you would invest 218.00 in Gold Road Resources on October 11, 2024 and sell it today you would lose (5.00) from holding Gold Road Resources or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Dug Technology
Performance |
| Timeline |
| Gold Road Resources |
| Dug Technology |
Gold Road and Dug Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Dug Technology
The main advantage of trading using opposite Gold Road and Dug Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Dug Technology 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 Dug Technology will offset losses from the drop in Dug Technology's long position.| Gold Road vs. Collins Foods | Gold Road vs. Bio Gene Technology | Gold Road vs. Home Consortium | Gold Road vs. Stelar Metals |
| Dug Technology vs. Andean Silver Limited | Dug Technology vs. Perseus Mining | Dug Technology vs. 4Dmedical | Dug Technology vs. Gold Road Resources |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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