Correlation Between GOLD ROAD and HOYA

Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and HOYA 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 HOYA 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 HOYA Corporation, you can compare the effects of market volatilities on GOLD ROAD and HOYA 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 HOYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and HOYA.

Diversification Opportunities for GOLD ROAD and HOYA

-0.1

Correlation Coefficient

GOLD ROAD  HOYA

Good diversification

The 3 months correlation between GOLD and HOYA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and HOYA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA 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 HOYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and HOYA go up and down completely randomly.

Pair Corralation between GOLD ROAD and HOYA

Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.24 times more return on investment than HOYA. However, GOLD ROAD is 1.24 times more volatile than HOYA Corporation. It trades about 0.17 of its potential returns per unit of risk. HOYA Corporation is currently generating about -0.12 per unit of risk. If you would invest  121.00  in GOLD ROAD RES on December 3, 2024 and sell it today you would earn a total of  27.00  from holding GOLD ROAD RES or generate 22.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

GOLD ROAD RES  vs.  HOYA Corp.

GOLD ROAD RES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 13 (%) 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.

HOYA

Risk-Adjusted Performance

Very Weak

Over the last 90 days HOYA Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GOLD ROAD and HOYA

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

The idea behind GOLD ROAD RES and HOYA Corporation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.