Correlation Between BAIYU Holdings and US GoldMining
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 93.65% |
Values | Daily Returns |
BAIYU Holdings vs. US GoldMining Common
Performance |
Timeline |
BAIYU Holdings |
US GoldMining Common |
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.BAIYU Holdings vs. Fomento Economico Mexicano | BAIYU Holdings vs. Fernhill Beverage | BAIYU Holdings vs. U Haul Holding | BAIYU Holdings vs. Hertz Global Holdings |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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