Correlation Between Boldt SA and Gold Fields

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

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

Diversification Opportunities for Boldt SA and Gold Fields

-0.71

Correlation Coefficient

Boldt SA  Gold Fields

Pay attention - limited upside

The 3 months correlation between Boldt and Gold is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Boldt SA and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Boldt SA 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 Boldt SA are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Boldt SA i.e., Boldt SA and Gold Fields go up and down completely randomly.

Pair Corralation between Boldt SA and Gold Fields

Assuming the 90 days trading horizon Boldt SA is expected to generate 0.9 times more return on investment than Gold Fields. However, Boldt SA is 1.11 times less risky than Gold Fields. It trades about 0.02 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.05 per unit of risk. If you would invest  5,340  in Boldt SA on September 12, 2024 and sell it today you would earn a total of  30.00  from holding Boldt SA or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Boldt SA  vs.  Gold Fields Ltd

Boldt SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boldt SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Boldt SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gold Fields

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Fields Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Boldt SA and Gold Fields

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

The idea behind Boldt SA and Gold Fields Ltd 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.