Correlation Between Gold Fields and TD Holdings

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

Diversification Opportunities for Gold Fields and TD Holdings

0.0

Correlation Coefficient

Gold Fields  TD Holdings

Pay attention - limited upside

The 3 months correlation between Gold and GLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and TD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Holdings 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 TD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Holdings has no effect on the direction of Gold Fields i.e., Gold Fields and TD Holdings go up and down completely randomly.

Pair Corralation between Gold Fields and TD Holdings

If you would invest  1,728  in Gold Fields Ltd on December 1, 2024 and sell it today you would earn a total of  69.00  from holding Gold Fields Ltd or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gold Fields Ltd  vs.  TD Holdings

Gold Fields

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Fields Ltd are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Gold Fields demonstrated solid returns over the last few months and may actually be approaching a breakup point.

TD Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gold Fields and TD Holdings

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

The idea behind Gold Fields Ltd and TD Holdings 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.