Correlation Between GOLD ROAD and Hays Plc

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

By analyzing existing cross correlation between GOLD ROAD RES and Hays plc, you can compare the effects of market volatilities on GOLD ROAD and Hays Plc 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 GOLD ROAD with a short position of Hays Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Hays Plc.

Diversification Opportunities for GOLD ROAD and Hays Plc

-0.54

Correlation Coefficient

GOLD ROAD  Hays Plc

Excellent diversification

The 3 months correlation between GOLD and Hays is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and Hays plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hays plc and GOLD ROAD 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 GOLD ROAD RES are associated (or correlated) with Hays Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hays plc has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and Hays Plc go up and down completely randomly.

Pair Corralation between GOLD ROAD and Hays Plc

Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.72 times more return on investment than Hays Plc. However, GOLD ROAD RES is 1.39 times less risky than Hays Plc. It trades about 0.2 of its potential returns per unit of risk. Hays plc is currently generating about -0.03 per unit of risk. If you would invest  95.00  in GOLD ROAD RES on September 17, 2024 and sell it today you would earn a total of  31.00  from holding GOLD ROAD RES or generate 32.63% return on investment over 90 days.

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

GOLD ROAD RES  vs.  Hays plc

GOLD ROAD RES

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hays plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GOLD ROAD and Hays Plc

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

The idea behind GOLD ROAD RES and Hays plc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..