Correlation Between NACCO Industries and Gold Resource
Can any of the company-specific risk be diversified away by investing in both NACCO Industries and Gold Resource 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 Gold Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NACCO Industries and Gold Resource, you can compare the effects of market volatilities on NACCO Industries and Gold Resource 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 Gold Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of NACCO Industries and Gold Resource.
Diversification Opportunities for NACCO Industries and Gold Resource
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NACCO and Gold is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding NACCO Industries and Gold Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Resource 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 Gold Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Resource has no effect on the direction of NACCO Industries i.e., NACCO Industries and Gold Resource go up and down completely randomly.
Pair Corralation between NACCO Industries and Gold Resource
Allowing for the 90-day total investment horizon NACCO Industries is expected to generate 0.34 times more return on investment than Gold Resource. However, NACCO Industries is 2.96 times less risky than Gold Resource. It trades about 0.02 of its potential returns per unit of risk. Gold Resource is currently generating about -0.05 per unit of risk. If you would invest 3,187 in NACCO Industries on September 1, 2024 and sell it today you would earn a total of 34.00 from holding NACCO Industries or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NACCO Industries vs. Gold Resource
Performance |
| Timeline |
| NACCO Industries |
| Gold Resource |
NACCO Industries and Gold Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NACCO Industries and Gold Resource
The main advantage of trading using opposite NACCO Industries and Gold Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NACCO Industries position performs unexpectedly, Gold Resource 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 Resource will offset losses from the drop in Gold Resource's long position.| NACCO Industries vs. Alliance Resource Partners | NACCO Industries vs. Hallador Energy | NACCO Industries vs. Consol Energy | NACCO Industries vs. Indo Tambangraya Megah |
| Gold Resource vs. IAMGold | Gold Resource vs. Eldorado Gold Corp | Gold Resource vs. Coeur Mining | Gold Resource vs. Alamos Gold |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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