Correlation Between Golden Metal and MOL Hungarian

Can any of the company-specific risk be diversified away by investing in both Golden Metal and MOL Hungarian 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 Golden Metal and MOL Hungarian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golden Metal Resources and MOL Hungarian Oil, you can compare the effects of market volatilities on Golden Metal and MOL Hungarian 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 Golden Metal with a short position of MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and MOL Hungarian.

Diversification Opportunities for Golden Metal and MOL Hungarian

0.0

Correlation Coefficient

Golden Metal  MOL Hungarian

Pay attention - limited upside

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

Pair Corralation between Golden Metal and MOL Hungarian

If you would invest  2,800  in Golden Metal Resources on December 23, 2024 and sell it today you would earn a total of  1,300  from holding Golden Metal Resources or generate 46.43% return on investment over 90 days.

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

Golden Metal Resources  vs.  MOL Hungarian Oil

Golden Metal Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Metal Resources are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Golden Metal unveiled solid returns over the last few months and may actually be approaching a breakup point.

MOL Hungarian Oil

Risk-Adjusted Performance

Very Weak

Over the last 90 days MOL Hungarian Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MOL Hungarian is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Golden Metal and MOL Hungarian

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

The idea behind Golden Metal Resources and MOL Hungarian Oil 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..