Correlation Between Gold Road and Maggie Beer
Can any of the company-specific risk be diversified away by investing in both Gold Road and Maggie Beer 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 Maggie Beer 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 Maggie Beer Holdings, you can compare the effects of market volatilities on Gold Road and Maggie Beer 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 Maggie Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Maggie Beer.
Diversification Opportunities for Gold Road and Maggie Beer
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gold and Maggie is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Maggie Beer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maggie Beer Holdings 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 Maggie Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maggie Beer Holdings has no effect on the direction of Gold Road i.e., Gold Road and Maggie Beer go up and down completely randomly.
Pair Corralation between Gold Road and Maggie Beer
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 0.34 times more return on investment than Maggie Beer. However, Gold Road Resources is 2.93 times less risky than Maggie Beer. It trades about 1.04 of its potential returns per unit of risk. Maggie Beer Holdings is currently generating about 0.1 per unit of risk. If you would invest 203.00 in Gold Road Resources on October 25, 2024 and sell it today you would earn a total of 49.00 from holding Gold Road Resources or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Maggie Beer Holdings
Performance |
| Timeline |
| Gold Road Resources |
| Maggie Beer Holdings |
Gold Road and Maggie Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Maggie Beer
The main advantage of trading using opposite Gold Road and Maggie Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Maggie Beer 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 Maggie Beer will offset losses from the drop in Maggie Beer's long position.| Gold Road vs. Clime Investment Management | Gold Road vs. Carlton Investments | Gold Road vs. Hotel Property Investments | Gold Road vs. Diversified United Investment |
| Maggie Beer vs. Steamships Trading | Maggie Beer vs. Truscott Mining Corp | Maggie Beer vs. Diversified United Investment | Maggie Beer vs. Clime Investment Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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