Correlation Between Gold Fields and WiSA Technologies

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

Diversification Opportunities for Gold Fields and WiSA Technologies

-0.19

Correlation Coefficient

Gold Fields  WiSA Technologies

Good diversification

The 3 months correlation between Gold and WiSA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and WiSA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiSA Technologies 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 WiSA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiSA Technologies has no effect on the direction of Gold Fields i.e., Gold Fields and WiSA Technologies go up and down completely randomly.

Pair Corralation between Gold Fields and WiSA Technologies

Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 0.24 times more return on investment than WiSA Technologies. However, Gold Fields Ltd is 4.1 times less risky than WiSA Technologies. It trades about 0.3 of its potential returns per unit of risk. WiSA Technologies is currently generating about -0.05 per unit of risk. If you would invest  1,358  in Gold Fields Ltd on October 20, 2024 and sell it today you would earn a total of  171.00  from holding Gold Fields Ltd or generate 12.59% return on investment over 90 days.

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

Gold Fields Ltd  vs.  WiSA Technologies

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

WiSA Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WiSA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Gold Fields and WiSA Technologies

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

The idea behind Gold Fields Ltd and WiSA Technologies 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 Stocks Directory module to find actively traded stocks across global markets.