Correlation Between Gold Springs and Peloton Minerals

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

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

Diversification Opportunities for Gold Springs and Peloton Minerals

0.03

Correlation Coefficient

Gold Springs  Peloton Minerals

Significant diversification

The 3 months correlation between Gold and Peloton is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gold Springs Resource and Peloton Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Minerals and Gold Springs 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 Gold Springs Resource are associated (or correlated) with Peloton Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Minerals has no effect on the direction of Gold Springs i.e., Gold Springs and Peloton Minerals go up and down completely randomly.

Pair Corralation between Gold Springs and Peloton Minerals

Assuming the 90 days horizon Gold Springs Resource is expected to under-perform the Peloton Minerals. But the otc stock apears to be less risky and, when comparing its historical volatility, Gold Springs Resource is 1.05 times less risky than Peloton Minerals. The otc stock trades about -0.02 of its potential returns per unit of risk. The Peloton Minerals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6.70  in Peloton Minerals on September 4, 2024 and sell it today you would lose (0.50) from holding Peloton Minerals or give up 7.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Gold Springs Resource  vs.  Peloton Minerals

Gold Springs Resource

Risk-Adjusted Performance

0 of 100

Very Weak

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

Peloton Minerals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peloton Minerals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Peloton Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gold Springs and Peloton Minerals

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

The idea behind Gold Springs Resource and Peloton Minerals 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.