Correlation Between Plaza Centers and Gold Bond

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Plaza Centers and Gold Bond 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 Plaza Centers and Gold Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and The Gold Bond, you can compare the effects of market volatilities on Plaza Centers and Gold Bond 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 Plaza Centers with a short position of Gold Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and Gold Bond.

Diversification Opportunities for Plaza Centers and Gold Bond

-0.88
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Plaza and Gold is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV and The Gold Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bond and Plaza Centers 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 Plaza Centers NV are associated (or correlated) with Gold Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bond has no effect on the direction of Plaza Centers i.e., Plaza Centers and Gold Bond go up and down completely randomly.

Pair Corralation between Plaza Centers and Gold Bond

Assuming the 90 days trading horizon Plaza Centers NV is expected to generate 5.21 times more return on investment than Gold Bond. However, Plaza Centers is 5.21 times more volatile than The Gold Bond. It trades about 0.06 of its potential returns per unit of risk. The Gold Bond is currently generating about 0.03 per unit of risk. If you would invest  9,350  in Plaza Centers NV on September 12, 2024 and sell it today you would earn a total of  10,870  from holding Plaza Centers NV or generate 116.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Plaza Centers NV  vs.  The Gold Bond

 Performance 
       Timeline  
Plaza Centers NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Plaza Centers NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Gold Bond 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bond are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gold Bond sustained solid returns over the last few months and may actually be approaching a breakup point.

Plaza Centers and Gold Bond Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Plaza Centers and Gold Bond

The main advantage of trading using opposite Plaza Centers and Gold Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers position performs unexpectedly, Gold Bond 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 Bond will offset losses from the drop in Gold Bond's long position.
The idea behind Plaza Centers NV and The Gold Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas