Correlation Between Deluxe and Golden Matrix

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

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

Diversification Opportunities for Deluxe and Golden Matrix

0.07

Correlation Coefficient

Deluxe  Golden Matrix

Significant diversification

The 3 months correlation between Deluxe and Golden is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Golden Matrix Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Matrix Group and Deluxe 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 Deluxe are associated (or correlated) with Golden Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Matrix Group has no effect on the direction of Deluxe i.e., Deluxe and Golden Matrix go up and down completely randomly.

Pair Corralation between Deluxe and Golden Matrix

Considering the 90-day investment horizon Deluxe is expected to generate 0.46 times more return on investment than Golden Matrix. However, Deluxe is 2.19 times less risky than Golden Matrix. It trades about 0.13 of its potential returns per unit of risk. Golden Matrix Group is currently generating about -0.03 per unit of risk. If you would invest  1,956  in Deluxe on September 18, 2024 and sell it today you would earn a total of  376.00  from holding Deluxe or generate 19.22% return on investment over 90 days.

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

Deluxe  vs.  Golden Matrix Group

Deluxe

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Deluxe are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Deluxe showed solid returns over the last few months and may actually be approaching a breakup point.

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Deluxe and Golden Matrix

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

The idea behind Deluxe and Golden Matrix Group 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 CEOs Directory module to screen CEOs from public companies around the world.