Correlation Between Galiano Gold and United States

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

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

Diversification Opportunities for Galiano Gold and United States

0.15

Correlation Coefficient

Galiano Gold  United States

Average diversification

The 3 months correlation between Galiano and United is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and Galiano 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 Galiano Gold are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Galiano Gold i.e., Galiano Gold and United States go up and down completely randomly.

Pair Corralation between Galiano Gold and United States

Considering the 90-day investment horizon Galiano Gold is expected to under-perform the United States. In addition to that, Galiano Gold is 1.24 times more volatile than United States Steel. It trades about -0.02 of its total potential returns per unit of risk. United States Steel is currently generating about 0.13 per unit of volatility. If you would invest  3,639  in United States Steel on December 4, 2024 and sell it today you would earn a total of  245.00  from holding United States Steel or generate 6.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Galiano Gold  vs.  United States Steel

Galiano Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Galiano Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

United States Steel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, United States is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Galiano Gold and United States

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

The idea behind Galiano Gold and United States Steel 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.