Correlation Between Gold Road and Technology One
Can any of the company-specific risk be diversified away by investing in both Gold Road and Technology One 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 Technology One 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 Technology One, you can compare the effects of market volatilities on Gold Road and Technology One 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 Technology One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Technology One.
Diversification Opportunities for Gold Road and Technology One
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Technology is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Technology One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology One 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 Technology One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology One has no effect on the direction of Gold Road i.e., Gold Road and Technology One go up and down completely randomly.
Pair Corralation between Gold Road and Technology One
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 1.2 times more return on investment than Technology One. However, Gold Road is 1.2 times more volatile than Technology One. It trades about 0.01 of its potential returns per unit of risk. Technology One is currently generating about -0.02 per unit of risk. If you would invest 215.00 in Gold Road Resources on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Gold Road Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Technology One
Performance |
| Timeline |
| Gold Road Resources |
| Technology One |
Gold Road and Technology One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Technology One
The main advantage of trading using opposite Gold Road and Technology One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Technology One 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 Technology One will offset losses from the drop in Technology One's long position.| Gold Road vs. Collins Foods | Gold Road vs. Bio Gene Technology | Gold Road vs. Home Consortium | Gold Road vs. Stelar Metals |
| Technology One vs. Health and Plant | Technology One vs. Sandon Capital Investments | Technology One vs. Clime Investment Management | Technology One 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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