Correlation Between Flowery Gold and Campbell Resources

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

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

Diversification Opportunities for Flowery Gold and Campbell Resources

0.46

Correlation Coefficient

Flowery Gold  Campbell Resources

Very weak diversification

The 3 months correlation between Flowery and Campbell is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Flowery Gold Mines and Campbell Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Resources and Flowery Gold 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 Flowery Gold Mines are associated (or correlated) with Campbell Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campbell Resources has no effect on the direction of Flowery Gold i.e., Flowery Gold and Campbell Resources go up and down completely randomly.

Pair Corralation between Flowery Gold and Campbell Resources

If you would invest (100.00) in Campbell Resources on September 4, 2024 and sell it today you would earn a total of  100.00  from holding Campbell Resources or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Flowery Gold Mines  vs.  Campbell Resources

Flowery Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flowery Gold Mines 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 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.

Campbell Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Flowery Gold and Campbell Resources

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

The idea behind Flowery Gold Mines and Campbell Resources 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.