Correlation Between GCM Mining and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GCM Mining and Dow Jones 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 GCM Mining and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Mining Corp and Dow Jones Industrial, you can compare the effects of market volatilities on GCM Mining and Dow Jones 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 GCM Mining with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Mining and Dow Jones.
Diversification Opportunities for GCM Mining and Dow Jones
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCM and Dow is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding GCM Mining Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and GCM Mining 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 GCM Mining Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of GCM Mining i.e., GCM Mining and Dow Jones go up and down completely randomly.
Pair Corralation between GCM Mining and Dow Jones
Assuming the 90 days horizon GCM Mining is expected to generate 1.38 times less return on investment than Dow Jones. In addition to that, GCM Mining is 4.38 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,324,156 in Dow Jones Industrial on September 14, 2024 and sell it today you would earn a total of 1,067,256 from holding Dow Jones Industrial or generate 32.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.95% |
| Values | Daily Returns |
GCM Mining Corp vs. Dow Jones Industrial
Performance |
| Timeline |
GCM Mining and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GCM Mining Corp
Pair trading matchups for GCM Mining
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GCM Mining and Dow Jones
The main advantage of trading using opposite GCM Mining and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Mining position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| GCM Mining vs. Silver Tiger Metals | GCM Mining vs. Defiance Silver Corp | GCM Mining vs. Summa Silver Corp | GCM Mining vs. AbraSilver Resource Corp |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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