Correlation Between Gold Road and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Gold Road and ANZ Group 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 Road and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and ANZ Group Holdings, you can compare the effects of market volatilities on Gold Road and ANZ Group 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 Road with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and ANZ Group.
Diversification Opportunities for Gold Road and ANZ Group
Average diversification
The 3 months correlation between Gold and ANZ is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Gold Road 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 Road Resources are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Gold Road i.e., Gold Road and ANZ Group go up and down completely randomly.
Pair Corralation between Gold Road and ANZ Group
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 9.65 times more return on investment than ANZ Group. However, Gold Road is 9.65 times more volatile than ANZ Group Holdings. It trades about 0.24 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.03 per unit of risk. If you would invest 204.00 in Gold Road Resources on December 28, 2024 and sell it today you would earn a total of 89.00 from holding Gold Road Resources or generate 43.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gold Road Resources vs. ANZ Group Holdings
Performance |
Timeline |
Gold Road Resources |
ANZ Group Holdings |
Gold Road and ANZ Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gold Road and ANZ Group
The main advantage of trading using opposite Gold Road and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.Gold Road vs. Qbe Insurance Group | Gold Road vs. Air New Zealand | Gold Road vs. Australian Strategic Materials | Gold Road vs. oOhMedia |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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