Correlation Between Revolution Beauty and GoldMining
Can any of the company-specific risk be diversified away by investing in both Revolution Beauty and GoldMining 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 Revolution Beauty and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revolution Beauty Group and GoldMining, you can compare the effects of market volatilities on Revolution Beauty and GoldMining 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 Revolution Beauty with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revolution Beauty and GoldMining.
Diversification Opportunities for Revolution Beauty and GoldMining
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Revolution and GoldMining is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Revolution Beauty Group and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Revolution Beauty 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 Revolution Beauty Group are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Revolution Beauty i.e., Revolution Beauty and GoldMining go up and down completely randomly.
Pair Corralation between Revolution Beauty and GoldMining
Assuming the 90 days trading horizon Revolution Beauty Group is expected to under-perform the GoldMining. In addition to that, Revolution Beauty is 1.16 times more volatile than GoldMining. It trades about -0.21 of its total potential returns per unit of risk. GoldMining is currently generating about 0.03 per unit of volatility. If you would invest 120.00 in GoldMining on September 4, 2024 and sell it today you would earn a total of 1.00 from holding GoldMining or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Revolution Beauty Group vs. GoldMining
Performance |
| Timeline |
| Revolution Beauty |
| GoldMining |
Revolution Beauty and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revolution Beauty and GoldMining
The main advantage of trading using opposite Revolution Beauty and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revolution Beauty position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Revolution Beauty vs. GoldMining | Revolution Beauty vs. bet at home AG | Revolution Beauty vs. Wheaton Precious Metals | Revolution Beauty vs. Cornish Metals |
| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Toyota Motor Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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