Correlation Between Gold Fields and Flowery Gold
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Flowery Gold 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 Flowery Gold 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 Flowery Gold Mines, you can compare the effects of market volatilities on Gold Fields and Flowery Gold 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 Flowery Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Flowery Gold.
Diversification Opportunities for Gold Fields and Flowery Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Flowery is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Flowery Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowery Gold Mines 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 Flowery Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowery Gold Mines has no effect on the direction of Gold Fields i.e., Gold Fields and Flowery Gold go up and down completely randomly.
Pair Corralation between Gold Fields and Flowery Gold
Considering the 90-day investment horizon Gold Fields is expected to generate 1.42 times less return on investment than Flowery Gold. But when comparing it to its historical volatility, Gold Fields Ltd is 3.63 times less risky than Flowery Gold. It trades about 0.33 of its potential returns per unit of risk. Flowery Gold Mines is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Flowery Gold Mines on December 27, 2024 and sell it today you would earn a total of 10.00 from holding Flowery Gold Mines or generate 66.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Gold Fields Ltd vs. Flowery Gold Mines
Performance |
Timeline |
Gold Fields |
Flowery Gold Mines |
Gold Fields and Flowery Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gold Fields and Flowery Gold
The main advantage of trading using opposite Gold Fields and Flowery Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Flowery Gold 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 Flowery Gold will offset losses from the drop in Flowery Gold's long position.Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
Flowery Gold vs. Griffon | Flowery Gold vs. ioneer Ltd American | Flowery Gold vs. Rambler Metals and | Flowery Gold vs. Cementos Pacasmayo SAA |
Check out your portfolio center.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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Transaction History View history of all your transactions and understand their impact on performance | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |