Correlation Between Oakley Capital and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Oakley Capital and Golden Metal 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 Oakley Capital and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Golden Metal Resources, you can compare the effects of market volatilities on Oakley Capital and Golden Metal 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 Oakley Capital with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Golden Metal.
Diversification Opportunities for Oakley Capital and Golden Metal
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakley and Golden is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Oakley Capital i.e., Oakley Capital and Golden Metal go up and down completely randomly.
Pair Corralation between Oakley Capital and Golden Metal
Assuming the 90 days trading horizon Oakley Capital Investments is expected to under-perform the Golden Metal. But the stock apears to be less risky and, when comparing its historical volatility, Oakley Capital Investments is 4.54 times less risky than Golden Metal. The stock trades about -0.19 of its potential returns per unit of risk. The Golden Metal Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,300 in Golden Metal Resources on November 29, 2024 and sell it today you would earn a total of 0.00 from holding Golden Metal Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakley Capital Investments vs. Golden Metal Resources
Performance |
| Timeline |
| Oakley Capital Inves |
| Golden Metal Resources |
Oakley Capital and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Golden Metal
The main advantage of trading using opposite Oakley Capital and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital position performs unexpectedly, Golden Metal 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 Metal will offset losses from the drop in Golden Metal's long position.| Oakley Capital vs. Chrysalis Investments | Oakley Capital vs. Aberdeen Diversified Income | Oakley Capital vs. Tavistock Investments Plc | Oakley Capital vs. Gamma Communications PLC |
| Golden Metal vs. Bigblu Broadband PLC | Golden Metal vs. Wheaton Precious Metals | Golden Metal vs. Critical Metals Plc | Golden Metal vs. Kaufman Et Broad |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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