Correlation Between Triad Group and GoldMining
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and GoldMining, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and GoldMining.
Diversification Opportunities for Triad Group and GoldMining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Triad and GoldMining is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and GoldMining go up and down completely randomly.
Pair Corralation between Triad Group and GoldMining
Assuming the 90 days trading horizon Triad Group PLC is expected to under-perform the GoldMining. But the stock apears to be less risky and, when comparing its historical volatility, Triad Group PLC is 1.2 times less risky than GoldMining. The stock trades about -0.5 of its potential returns per unit of risk. The GoldMining is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 119.00 in GoldMining on September 24, 2024 and sell it today you would lose (3.00) from holding GoldMining or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Triad Group PLC vs. GoldMining
Performance |
| Timeline |
| Triad Group PLC |
| GoldMining |
Triad Group and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and GoldMining
The main advantage of trading using opposite Triad Group and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Chocoladefabriken Lindt Spruengli | Triad Group vs. Rockwood Realisation PLC | Triad Group vs. Toyota Motor Corp | Triad Group vs. Johnson Matthey PLC |
| GoldMining vs. Uniper SE | GoldMining vs. Mulberry Group PLC | GoldMining vs. London Security Plc | GoldMining vs. Triad Group PLC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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