Correlation Between Golden Matrix and Diamond Estates

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

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

Diversification Opportunities for Golden Matrix and Diamond Estates

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Correlation Coefficient

Golden Matrix  Diamond Estates

Pay attention - limited upside

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

Pair Corralation between Golden Matrix and Diamond Estates

Given the investment horizon of 90 days Golden Matrix Group is expected to generate 1.39 times more return on investment than Diamond Estates. However, Golden Matrix is 1.39 times more volatile than Diamond Estates Wines. It trades about 0.01 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about -0.06 per unit of risk. If you would invest  361.00  in Golden Matrix Group on September 28, 2024 and sell it today you would lose (154.00) from holding Golden Matrix Group or give up 42.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Golden Matrix Group  vs.  Diamond Estates Wines

Golden Matrix Group

Risk-Adjusted Performance

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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 fairly strong technical and fundamental indicators, Golden Matrix is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Diamond Estates Wines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Golden Matrix and Diamond Estates

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

The idea behind Golden Matrix Group and Diamond Estates Wines 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.