Correlation Between Gold Road and Skycity Entertainment
Can any of the company-specific risk be diversified away by investing in both Gold Road and Skycity Entertainment 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 Skycity Entertainment 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 Skycity Entertainment Group, you can compare the effects of market volatilities on Gold Road and Skycity Entertainment 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 Skycity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Skycity Entertainment.
Diversification Opportunities for Gold Road and Skycity Entertainment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and Skycity is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity Entertainment 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 Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of Gold Road i.e., Gold Road and Skycity Entertainment go up and down completely randomly.
Pair Corralation between Gold Road and Skycity Entertainment
Assuming the 90 days trading horizon Gold Road Resources is expected to under-perform the Skycity Entertainment. In addition to that, Gold Road is 1.25 times more volatile than Skycity Entertainment Group. It trades about -0.04 of its total potential returns per unit of risk. Skycity Entertainment Group is currently generating about 0.16 per unit of volatility. If you would invest 122.00 in Skycity Entertainment Group on August 25, 2024 and sell it today you would earn a total of 8.00 from holding Skycity Entertainment Group or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Skycity Entertainment Group
Performance |
| Timeline |
| Gold Road Resources |
| Skycity Entertainment |
Gold Road and Skycity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Skycity Entertainment
The main advantage of trading using opposite Gold Road and Skycity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Skycity Entertainment 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 Skycity Entertainment will offset losses from the drop in Skycity Entertainment's long position.| Gold Road vs. Northern Star Resources | Gold Road vs. Evolution Mining | Gold Road vs. Aneka Tambang Tbk | Gold Road vs. De Grey Mining |
| Skycity Entertainment vs. Alto Metals | Skycity Entertainment vs. Dicker Data | Skycity Entertainment vs. Clime Investment Management | Skycity Entertainment vs. Pinnacle 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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