Correlation Between BAIYU Holdings and US GoldMining

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Can any of the company-specific risk be diversified away by investing in both BAIYU Holdings and US 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 BAIYU Holdings and US GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIYU Holdings and US GoldMining Common, you can compare the effects of market volatilities on BAIYU Holdings and US 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 BAIYU Holdings with a short position of US GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIYU Holdings and US GoldMining.

Diversification Opportunities for BAIYU Holdings and US GoldMining

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between BAIYU and USGO is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BAIYU Holdings and US GoldMining Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US GoldMining Common and BAIYU Holdings 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 BAIYU Holdings are associated (or correlated) with US GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US GoldMining Common has no effect on the direction of BAIYU Holdings i.e., BAIYU Holdings and US GoldMining go up and down completely randomly.

Pair Corralation between BAIYU Holdings and US GoldMining

Considering the 90-day investment horizon BAIYU Holdings is expected to under-perform the US GoldMining. In addition to that, BAIYU Holdings is 1.54 times more volatile than US GoldMining Common. It trades about -0.31 of its total potential returns per unit of risk. US GoldMining Common is currently generating about 0.2 per unit of volatility. If you would invest  529.00  in US GoldMining Common on August 30, 2024 and sell it today you would earn a total of  740.00  from holding US GoldMining Common or generate 139.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy93.65%
ValuesDaily Returns

BAIYU Holdings  vs.  US GoldMining Common

 Performance 
       Timeline  
BAIYU Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BAIYU Holdings 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 basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
US GoldMining Common 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in US GoldMining Common are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, US GoldMining displayed solid returns over the last few months and may actually be approaching a breakup point.

BAIYU Holdings and US GoldMining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BAIYU Holdings and US GoldMining

The main advantage of trading using opposite BAIYU Holdings and US GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIYU Holdings position performs unexpectedly, US 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 US GoldMining will offset losses from the drop in US GoldMining's long position.
The idea behind BAIYU Holdings and US GoldMining Common 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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