Correlation Between Gold Fields and DarioHealth Corp

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

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

Diversification Opportunities for Gold Fields and DarioHealth Corp

0.69

Correlation Coefficient

Gold Fields  DarioHealth Corp

Poor diversification

The 3 months correlation between Gold and DarioHealth is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and DarioHealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DarioHealth Corp and Gold Fields 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 Fields Ltd are associated (or correlated) with DarioHealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DarioHealth Corp has no effect on the direction of Gold Fields i.e., Gold Fields and DarioHealth Corp go up and down completely randomly.

Pair Corralation between Gold Fields and DarioHealth Corp

Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 0.5 times more return on investment than DarioHealth Corp. However, Gold Fields Ltd is 2.02 times less risky than DarioHealth Corp. It trades about -0.04 of its potential returns per unit of risk. DarioHealth Corp is currently generating about -0.06 per unit of risk. If you would invest  1,535  in Gold Fields Ltd on October 5, 2024 and sell it today you would lose (129.00) from holding Gold Fields Ltd or give up 8.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Gold Fields Ltd  vs.  DarioHealth Corp

Gold Fields

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Fields Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

DarioHealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DarioHealth Corp 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 forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Gold Fields and DarioHealth Corp

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

The idea behind Gold Fields Ltd and DarioHealth Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.