Correlation Between NYSE Composite and Golden Lake
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Golden Lake 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 NYSE Composite and Golden Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Golden Lake Exploration, you can compare the effects of market volatilities on NYSE Composite and Golden Lake 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 NYSE Composite with a short position of Golden Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Golden Lake.
Diversification Opportunities for NYSE Composite and Golden Lake
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Golden is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Golden Lake Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Lake Exploration and NYSE Composite 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 NYSE Composite are associated (or correlated) with Golden Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Lake Exploration has no effect on the direction of NYSE Composite i.e., NYSE Composite and Golden Lake go up and down completely randomly.
Pair Corralation between NYSE Composite and Golden Lake
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.29 times less return on investment than Golden Lake. But when comparing it to its historical volatility, NYSE Composite is 16.53 times less risky than Golden Lake. It trades about 0.12 of its potential returns per unit of risk. Golden Lake Exploration is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.78 in Golden Lake Exploration on August 29, 2024 and sell it today you would lose (0.19) from holding Golden Lake Exploration or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Golden Lake Exploration
Performance |
| Timeline |
NYSE Composite and Golden Lake Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Golden Lake Exploration
Pair trading matchups for Golden Lake
Pair Trading with NYSE Composite and Golden Lake
The main advantage of trading using opposite NYSE Composite and Golden Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Golden Lake 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 Lake will offset losses from the drop in Golden Lake's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Golden Lake vs. Prime Meridian Resources | Golden Lake vs. Macmahon Holdings Limited | Golden Lake vs. Rokmaster Resources Corp | Golden Lake vs. Hudson Resources |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |