Correlation Between GoldMining and Ikigai Ventures

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

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

Diversification Opportunities for GoldMining and Ikigai Ventures

-0.17

Correlation Coefficient

GoldMining  Ikigai Ventures

Good diversification

The 3 months correlation between GoldMining and Ikigai is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Ikigai Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikigai Ventures and GoldMining 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 GoldMining are associated (or correlated) with Ikigai Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikigai Ventures has no effect on the direction of GoldMining i.e., GoldMining and Ikigai Ventures go up and down completely randomly.

Pair Corralation between GoldMining and Ikigai Ventures

Assuming the 90 days trading horizon GoldMining is expected to generate 1.98 times more return on investment than Ikigai Ventures. However, GoldMining is 1.98 times more volatile than Ikigai Ventures. It trades about 0.1 of its potential returns per unit of risk. Ikigai Ventures is currently generating about -0.13 per unit of risk. If you would invest  111.00  in GoldMining on December 24, 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	Insignificant
Accuracy	64.52%
Values	Daily Returns

GoldMining  vs.  Ikigai Ventures

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.

Ikigai Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ikigai Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with GoldMining and Ikigai Ventures

The main advantage of trading using opposite GoldMining and Ikigai Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Ikigai Ventures 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 Ikigai Ventures will offset losses from the drop in Ikigai Ventures' long position.

The idea behind GoldMining and Ikigai Ventures 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 Commodity Directory module to find actively traded commodities issued by global exchanges.