Correlation Between Golden Matrix and Stagwell

Can any of the company-specific risk be diversified away by investing in both Golden Matrix and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Golden Matrix and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Matrix and Stagwell.

Diversification Opportunities for Golden Matrix and Stagwell

0.22

Correlation Coefficient

Golden Matrix  Stagwell

Modest diversification

The 3 months correlation between Golden and Stagwell is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Golden Matrix i.e., Golden Matrix and Stagwell go up and down completely randomly.

Pair Corralation between Golden Matrix and Stagwell

Given the investment horizon of 90 days Golden Matrix Group is expected to under-perform the Stagwell. In addition to that, Golden Matrix is 3.1 times more volatile than Stagwell. It trades about -0.2 of its total potential returns per unit of risk. Stagwell is currently generating about -0.08 per unit of volatility. If you would invest  743.00  in Stagwell on September 18, 2024 and sell it today you would lose (23.00) from holding Stagwell or give up 3.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Golden Matrix Group  vs.  Stagwell

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.

Stagwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Stagwell is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Golden Matrix and Stagwell

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

The idea behind Golden Matrix Group and Stagwell 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.