Correlation Between Impax Environmental and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and Golden Metal 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 Impax Environmental and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Golden Metal Resources, you can compare the effects of market volatilities on Impax Environmental and Golden Metal 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 Impax Environmental with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Golden Metal.
Diversification Opportunities for Impax Environmental and Golden Metal
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Impax and Golden is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Impax Environmental 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 Impax Environmental Markets are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Impax Environmental i.e., Impax Environmental and Golden Metal go up and down completely randomly.
Pair Corralation between Impax Environmental and Golden Metal
Assuming the 90 days trading horizon Impax Environmental is expected to generate 3.01 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Impax Environmental Markets is 2.72 times less risky than Golden Metal. It trades about 0.12 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,050 in Golden Metal Resources on October 9, 2024 and sell it today you would earn a total of 150.00 from holding Golden Metal Resources or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Golden Metal Resources
Performance |
| Timeline |
| Impax Environmental |
| Golden Metal Resources |
Impax Environmental and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Golden Metal
The main advantage of trading using opposite Impax Environmental and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Impax Environmental vs. SupplyMe Capital PLC | Impax Environmental vs. SM Energy Co | Impax Environmental vs. FuelCell Energy | Impax Environmental vs. Grand Vision Media |
| Golden Metal vs. Compagnie Plastic Omnium | Golden Metal vs. Martin Marietta Materials | Golden Metal vs. STMicroelectronics NV | Golden Metal vs. Roadside Real Estate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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