Correlation Between SERI INDUSTRIAL and Gold Road
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Gold Road 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 SERI INDUSTRIAL and Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Gold Road Resources, you can compare the effects of market volatilities on SERI INDUSTRIAL and Gold Road 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 SERI INDUSTRIAL with a short position of Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Gold Road.
Diversification Opportunities for SERI INDUSTRIAL and Gold Road
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SERI and Gold is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Gold Road go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Gold Road
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to under-perform the Gold Road. In addition to that, SERI INDUSTRIAL is 1.3 times more volatile than Gold Road Resources. It trades about -0.04 of its total potential returns per unit of risk. Gold Road Resources is currently generating about 0.03 per unit of volatility. If you would invest 106.00 in Gold Road Resources on October 11, 2024 and sell it today you would earn a total of 20.00 from holding Gold Road Resources or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Gold Road Resources
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Gold Road Resources |
SERI INDUSTRIAL and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Gold Road
The main advantage of trading using opposite SERI INDUSTRIAL and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, Gold Road 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 Road will offset losses from the drop in Gold Road's long position.| SERI INDUSTRIAL vs. Ares Management Corp | SERI INDUSTRIAL vs. Waste Management | SERI INDUSTRIAL vs. MeVis Medical Solutions | SERI INDUSTRIAL vs. CVR Medical Corp |
| Gold Road vs. Aristocrat Leisure Limited | Gold Road vs. ARISTOCRAT LEISURE | Gold Road vs. SERI INDUSTRIAL EO | Gold Road vs. GRIFFIN MINING LTD |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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