Correlation Between Kaufman Et and GoldMining

Can any of the company-specific risk be diversified away by investing in both Kaufman Et 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 Kaufman Et and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kaufman Et Broad and GoldMining, you can compare the effects of market volatilities on Kaufman Et 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 Kaufman Et with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and GoldMining.

Diversification Opportunities for Kaufman Et and GoldMining

-0.52

Correlation Coefficient

Kaufman Et  GoldMining

Excellent diversification

The 3 months correlation between Kaufman and GoldMining is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Kaufman Et 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 Kaufman Et Broad 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 Kaufman Et i.e., Kaufman Et and GoldMining go up and down completely randomly.

Pair Corralation between Kaufman Et and GoldMining

Assuming the 90 days trading horizon Kaufman Et is expected to generate 8.71 times less return on investment than GoldMining. But when comparing it to its historical volatility, Kaufman Et Broad is 1.68 times less risky than GoldMining. It trades about 0.02 of its potential returns per unit of risk. GoldMining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  111.00  in GoldMining on December 25, 2024 and sell it today you would earn a total of  10.00  from holding GoldMining or generate 9.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	65.57%
Values	Daily Returns

Kaufman Et Broad  vs.  GoldMining

Kaufman Et Broad

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaufman Et Broad are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Kaufman Et is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

GoldMining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GoldMining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GoldMining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaufman Et and GoldMining

The main advantage of trading using opposite Kaufman Et and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et 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.

The idea behind Kaufman Et Broad and GoldMining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.