Correlation Between Progressive Corp and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Progressive Corp and Gold Fields 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 Progressive Corp and Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and Gold Fields Ltd, you can compare the effects of market volatilities on Progressive Corp and Gold Fields 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 Progressive Corp with a short position of Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and Gold Fields.
Diversification Opportunities for Progressive Corp and Gold Fields
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Progressive and Gold is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Progressive Corp 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 Progressive Corp are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Progressive Corp i.e., Progressive Corp and Gold Fields go up and down completely randomly.
Pair Corralation between Progressive Corp and Gold Fields
Considering the 90-day investment horizon Progressive Corp is expected to generate 0.48 times more return on investment than Gold Fields. However, Progressive Corp is 2.08 times less risky than Gold Fields. It trades about 0.3 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.23 per unit of risk. If you would invest 24,300 in Progressive Corp on August 31, 2024 and sell it today you would earn a total of 2,386 from holding Progressive Corp or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progressive Corp vs. Gold Fields Ltd
Performance |
| Timeline |
| Progressive Corp |
| Gold Fields |
Progressive Corp and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and Gold Fields
The main advantage of trading using opposite Progressive Corp and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp position performs unexpectedly, Gold Fields 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 Fields will offset losses from the drop in Gold Fields' long position.| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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