Correlation Between Beowulf Mining and GoldMining

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

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

Diversification Opportunities for Beowulf Mining and GoldMining

-0.33

Correlation Coefficient

Beowulf Mining  GoldMining

Very good diversification

The 3 months correlation between Beowulf and GoldMining is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining i.e., Beowulf Mining and GoldMining go up and down completely randomly.

Pair Corralation between Beowulf Mining and GoldMining

Assuming the 90 days trading horizon Beowulf Mining is expected to under-perform the GoldMining. In addition to that, Beowulf Mining is 1.18 times more volatile than GoldMining. It trades about -0.25 of its total potential returns per unit of risk. GoldMining is currently generating about -0.09 per unit of volatility. If you would invest  138.00  in GoldMining on September 15, 2024 and sell it today you would lose (16.00) from holding GoldMining or give up 11.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.69%
Values	Daily Returns

Beowulf Mining  vs.  GoldMining

Beowulf Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beowulf Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

GoldMining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Beowulf Mining and GoldMining

The main advantage of trading using opposite Beowulf Mining and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining 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 Beowulf Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.