Correlation Between Golden Matrix and Western Digital

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

Diversification Opportunities for Golden Matrix and Western Digital

0.14

Correlation Coefficient

Golden Matrix  Western Digital

Average diversification

The 3 months correlation between Golden and Western is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital 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 Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of Golden Matrix i.e., Golden Matrix and Western Digital go up and down completely randomly.

Pair Corralation between Golden Matrix and Western Digital

Given the investment horizon of 90 days Golden Matrix is expected to generate 1.44 times less return on investment than Western Digital. In addition to that, Golden Matrix is 2.29 times more volatile than Western Digital. It trades about 0.02 of its total potential returns per unit of risk. Western Digital is currently generating about 0.07 per unit of volatility. If you would invest  3,787  in Western Digital on September 30, 2024 and sell it today you would earn a total of  2,283  from holding Western Digital or generate 60.29% return on investment over 90 days.

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

Golden Matrix Group  vs.  Western Digital

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.

Western Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Golden Matrix and Western Digital

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

The idea behind Golden Matrix Group and Western Digital 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.