Correlation Between Bold Ventures and Highway 50

Can any of the company-specific risk be diversified away by investing in both Bold Ventures and Highway 50 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 Bold Ventures and Highway 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bold Ventures and Highway 50 Gold, you can compare the effects of market volatilities on Bold Ventures and Highway 50 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 Bold Ventures with a short position of Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bold Ventures and Highway 50.

Diversification Opportunities for Bold Ventures and Highway 50

0.52

Correlation Coefficient

Bold Ventures  Highway 50

Very weak diversification

The 3 months correlation between Bold and Highway is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bold Ventures and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold and Bold Ventures 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 Bold Ventures are associated (or correlated) with Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Bold Ventures i.e., Bold Ventures and Highway 50 go up and down completely randomly.

Pair Corralation between Bold Ventures and Highway 50

Assuming the 90 days horizon Bold Ventures is expected to generate 1.14 times less return on investment than Highway 50. In addition to that, Bold Ventures is 1.39 times more volatile than Highway 50 Gold. It trades about 0.02 of its total potential returns per unit of risk. Highway 50 Gold is currently generating about 0.03 per unit of volatility. If you would invest  14.00  in Highway 50 Gold on September 26, 2024 and sell it today you would lose (1.00) from holding Highway 50 Gold or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Bold Ventures  vs.  Highway 50 Gold

Bold Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bold Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Highway 50 Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highway 50 Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Bold Ventures and Highway 50

The main advantage of trading using opposite Bold Ventures and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bold Ventures position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50's long position.

The idea behind Bold Ventures and Highway 50 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.