Correlation Between Treasury Metals and Steppe Gold

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

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

Diversification Opportunities for Treasury Metals and Steppe Gold

0.0

Correlation Coefficient

Treasury Metals  Steppe Gold

Pay attention - limited upside

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

Pair Corralation between Treasury Metals and Steppe Gold

If you would invest  45.00  in Steppe Gold on December 3, 2024 and sell it today you would earn a total of  3.00  from holding Steppe Gold or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Treasury Metals  vs.  Steppe Gold

Treasury Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treasury Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Treasury Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Steppe Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steppe Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Steppe Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Treasury Metals and Steppe Gold

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

The idea behind Treasury Metals and Steppe 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.