Correlation Between Golden Minerals and Buyer Group

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

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

Diversification Opportunities for Golden Minerals and Buyer Group

-0.02

Correlation Coefficient

Golden Minerals  Buyer Group

Good diversification

The 3 months correlation between Golden and Buyer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Golden Minerals and Buyer Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyer Group International and Golden Minerals 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 Golden Minerals are associated (or correlated) with Buyer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyer Group International has no effect on the direction of Golden Minerals i.e., Golden Minerals and Buyer Group go up and down completely randomly.

Pair Corralation between Golden Minerals and Buyer Group

Given the investment horizon of 90 days Golden Minerals is expected to under-perform the Buyer Group. But the stock apears to be less risky and, when comparing its historical volatility, Golden Minerals is 1.12 times less risky than Buyer Group. The stock trades about -0.17 of its potential returns per unit of risk. The Buyer Group International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  0.18  in Buyer Group International on September 26, 2024 and sell it today you would lose (0.04) from holding Buyer Group International or give up 22.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Golden Minerals  vs.  Buyer Group International

Golden Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Buyer Group International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Buyer Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Buyer Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Golden Minerals and Buyer Group

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

The idea behind Golden Minerals and Buyer Group International 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.