Correlation Between INTERSHOP Communications and Gold Road

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Can any of the company-specific risk be diversified away by investing in both INTERSHOP Communications and Gold Road 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 INTERSHOP Communications and Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERSHOP Communications Aktiengesellschaft and Gold Road Resources, you can compare the effects of market volatilities on INTERSHOP Communications and Gold Road 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 INTERSHOP Communications with a short position of Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERSHOP Communications and Gold Road.

Diversification Opportunities for INTERSHOP Communications and Gold Road

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between INTERSHOP and Gold is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft are associated (or correlated) with Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of INTERSHOP Communications i.e., INTERSHOP Communications and Gold Road go up and down completely randomly.

Pair Corralation between INTERSHOP Communications and Gold Road

Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to under-perform the Gold Road. In addition to that, INTERSHOP Communications is 1.02 times more volatile than Gold Road Resources. It trades about -0.01 of its total potential returns per unit of risk. Gold Road Resources is currently generating about 0.05 per unit of volatility. If you would invest  90.00  in Gold Road Resources on December 4, 2024 and sell it today you would earn a total of  53.00  from holding Gold Road Resources or generate 58.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

INTERSHOP Communications Aktie  vs.  Gold Road Resources

 Performance 
       Timeline  
INTERSHOP Communications 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in INTERSHOP Communications Aktiengesellschaft are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, INTERSHOP Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.
Gold Road Resources 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.

INTERSHOP Communications and Gold Road Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with INTERSHOP Communications and Gold Road

The main advantage of trading using opposite INTERSHOP Communications and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.
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The idea behind INTERSHOP Communications Aktiengesellschaft and Gold Road Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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