Correlation Between Young Cos and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Golden Metal Resources, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Golden Metal.
Diversification Opportunities for Young Cos and Golden Metal
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Young and Golden is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery 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 Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Golden Metal go up and down completely randomly.
Pair Corralation between Young Cos and Golden Metal
Assuming the 90 days trading horizon Young Cos Brewery is expected to under-perform the Golden Metal. But the stock apears to be less risky and, when comparing its historical volatility, Young Cos Brewery is 1.07 times less risky than Golden Metal. The stock trades about -0.08 of its potential returns per unit of risk. The Golden Metal Resources is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,800 in Golden Metal Resources on October 25, 2024 and sell it today you would earn a total of 450.00 from holding Golden Metal Resources or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Young Cos Brewery vs. Golden Metal Resources
Performance |
| Timeline |
| Young Cos Brewery |
| Golden Metal Resources |
Young Cos and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Golden Metal
The main advantage of trading using opposite Young Cos and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Ross Stores | Young Cos vs. JB Hunt Transport | Young Cos vs. Zurich Insurance Group | Young Cos vs. UNIQA Insurance Group |
| Golden Metal vs. Young Cos Brewery | Golden Metal vs. Sydbank | Golden Metal vs. Nordic Semiconductor ASA | Golden Metal vs. St Galler Kantonalbank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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