Correlation Between NACCO Industries and GCM Resources
Can any of the company-specific risk be diversified away by investing in both NACCO Industries and GCM Resources 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 NACCO Industries and GCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NACCO Industries and GCM Resources Plc, you can compare the effects of market volatilities on NACCO Industries and GCM Resources 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 NACCO Industries with a short position of GCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NACCO Industries and GCM Resources.
Diversification Opportunities for NACCO Industries and GCM Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NACCO and GCM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NACCO Industries and GCM Resources Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Resources Plc and NACCO Industries 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 NACCO Industries are associated (or correlated) with GCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Resources Plc has no effect on the direction of NACCO Industries i.e., NACCO Industries and GCM Resources go up and down completely randomly.
Pair Corralation between NACCO Industries and GCM Resources
Allowing for the 90-day total investment horizon NACCO Industries is expected to under-perform the GCM Resources. But the stock apears to be less risky and, when comparing its historical volatility, NACCO Industries is 5.62 times less risky than GCM Resources. The stock trades about 0.0 of its potential returns per unit of risk. The GCM Resources Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8.00 in GCM Resources Plc on September 3, 2024 and sell it today you would earn a total of 4.00 from holding GCM Resources Plc or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NACCO Industries vs. GCM Resources Plc
Performance |
| Timeline |
| NACCO Industries |
| GCM Resources Plc |
NACCO Industries and GCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NACCO Industries and GCM Resources
The main advantage of trading using opposite NACCO Industries and GCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NACCO Industries position performs unexpectedly, GCM Resources 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 GCM Resources will offset losses from the drop in GCM Resources' long position.| NACCO Industries vs. Alliance Resource Partners | NACCO Industries vs. Hallador Energy | NACCO Industries vs. Consol Energy | NACCO Industries vs. Indo Tambangraya Megah |
| GCM Resources vs. NACCO Industries | GCM Resources vs. Alliance Resource Partners | GCM Resources vs. Hallador Energy | GCM Resources vs. Consol Energy |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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