Correlation Between Nasdaq and Granada Gold

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

By analyzing existing cross correlation between Nasdaq Inc and Granada Gold Mine, you can compare the effects of market volatilities on Nasdaq and Granada Gold 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 Nasdaq with a short position of Granada Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Granada Gold.

Diversification Opportunities for Nasdaq and Granada Gold

-0.13

Correlation Coefficient

Nasdaq  Granada Gold

Good diversification

The 3 months correlation between Nasdaq and Granada is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Granada Gold Mine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granada Gold Mine and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Granada Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granada Gold Mine has no effect on the direction of Nasdaq i.e., Nasdaq and Granada Gold go up and down completely randomly.

Pair Corralation between Nasdaq and Granada Gold

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Granada Gold. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 14.28 times less risky than Granada Gold. The stock trades about -0.17 of its potential returns per unit of risk. The Granada Gold Mine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Granada Gold Mine on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Granada Gold Mine or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Nasdaq Inc  vs.  Granada Gold Mine

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Granada Gold Mine

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Granada Gold Mine are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Granada Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and Granada Gold

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

The idea behind Nasdaq Inc and Granada Gold Mine 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.