Correlation Between URU Metals and Golden Metal
Can any of the company-specific risk be diversified away by investing in both URU Metals and Golden Metal 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 URU Metals and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URU Metals and Golden Metal Resources, you can compare the effects of market volatilities on URU Metals and Golden Metal 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 URU Metals with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of URU Metals and Golden Metal.
Diversification Opportunities for URU Metals and Golden Metal
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between URU and Golden is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding URU Metals and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and URU Metals 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 URU Metals are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of URU Metals i.e., URU Metals and Golden Metal go up and down completely randomly.
Pair Corralation between URU Metals and Golden Metal
Assuming the 90 days trading horizon URU Metals is expected to generate 1.04 times less return on investment than Golden Metal. But when comparing it to its historical volatility, URU Metals is 1.07 times less risky than Golden Metal. It trades about 0.21 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Golden Metal Resources on November 2, 2024 and sell it today you would earn a total of 400.00 from holding Golden Metal Resources or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
URU Metals vs. Golden Metal Resources
Performance |
| Timeline |
| URU Metals |
| Golden Metal Resources |
URU Metals and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URU Metals and Golden Metal
The main advantage of trading using opposite URU Metals and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URU Metals position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| URU Metals vs. Check Point Software | URU Metals vs. Xeros Technology Group | URU Metals vs. Axway Software SA | URU Metals vs. Alfa Financial Software |
| Golden Metal vs. Ryanair Holdings plc | Golden Metal vs. Ross Stores | Golden Metal vs. Spirent Communications plc | Golden Metal vs. Zoom Video Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| 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 | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |