Correlation Between Gulf Island and St James

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Can any of the company-specific risk be diversified away by investing in both Gulf Island and St James 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 Gulf Island and St James into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Island Fabrication and St James Gold, you can compare the effects of market volatilities on Gulf Island and St James 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 Gulf Island with a short position of St James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Island and St James.

Diversification Opportunities for Gulf Island and St James

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Gulf and LRDJF is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Island Fabrication and St James Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St James Gold and Gulf Island 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 Gulf Island Fabrication are associated (or correlated) with St James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St James Gold has no effect on the direction of Gulf Island i.e., Gulf Island and St James go up and down completely randomly.

Pair Corralation between Gulf Island and St James

Given the investment horizon of 90 days Gulf Island Fabrication is expected to generate 0.34 times more return on investment than St James. However, Gulf Island Fabrication is 2.9 times less risky than St James. It trades about 0.07 of its potential returns per unit of risk. St James Gold is currently generating about 0.02 per unit of risk. If you would invest  410.00  in Gulf Island Fabrication on September 23, 2024 and sell it today you would earn a total of  276.00  from holding Gulf Island Fabrication or generate 67.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Gulf Island Fabrication  vs.  St James Gold

 Performance 
       Timeline  
Gulf Island Fabrication 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gulf Island Fabrication are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Gulf Island demonstrated solid returns over the last few months and may actually be approaching a breakup point.
St James Gold 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in St James Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, St James reported solid returns over the last few months and may actually be approaching a breakup point.

Gulf Island and St James Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gulf Island and St James

The main advantage of trading using opposite Gulf Island and St James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Island position performs unexpectedly, St James 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 St James will offset losses from the drop in St James' long position.
The idea behind Gulf Island Fabrication and St James Gold 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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