Correlation Between Kingstone Companies and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Kingstone Companies and Gold Fields 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 Kingstone Companies and Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingstone Companies and Gold Fields Ltd, you can compare the effects of market volatilities on Kingstone Companies and Gold Fields 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 Kingstone Companies with a short position of Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstone Companies and Gold Fields.
Diversification Opportunities for Kingstone Companies and Gold Fields
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kingstone and Gold is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kingstone Companies and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Kingstone Companies 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 Kingstone Companies are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Kingstone Companies i.e., Kingstone Companies and Gold Fields go up and down completely randomly.
Pair Corralation between Kingstone Companies and Gold Fields
Given the investment horizon of 90 days Kingstone Companies is expected to generate 1.76 times more return on investment than Gold Fields. However, Kingstone Companies is 1.76 times more volatile than Gold Fields Ltd. It trades about 0.41 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.23 per unit of risk. If you would invest 973.00 in Kingstone Companies on August 28, 2024 and sell it today you would earn a total of 529.00 from holding Kingstone Companies or generate 54.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingstone Companies vs. Gold Fields Ltd
Performance |
| Timeline |
| Kingstone Companies |
| Gold Fields |
Kingstone Companies and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingstone Companies and Gold Fields
The main advantage of trading using opposite Kingstone Companies and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingstone Companies position performs unexpectedly, Gold Fields 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 Fields will offset losses from the drop in Gold Fields' long position.| Kingstone Companies vs. HCI Group | Kingstone Companies vs. Universal Insurance Holdings | Kingstone Companies vs. Horace Mann Educators | Kingstone Companies vs. Heritage Insurance Hldgs |
| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
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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