Correlation Between Stagwell and Golden Matrix

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

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

Diversification Opportunities for Stagwell and Golden Matrix

0.22

Correlation Coefficient

Stagwell  Golden Matrix

Modest diversification

The 3 months correlation between Stagwell and Golden is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell 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 Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and Golden Matrix go up and down completely randomly.

Pair Corralation between Stagwell and Golden Matrix

Given the investment horizon of 90 days Stagwell is expected to generate 0.47 times more return on investment than Golden Matrix. However, Stagwell is 2.11 times less risky than Golden Matrix. It trades about 0.0 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  733.00  in Stagwell on September 18, 2024 and sell it today you would lose (13.00) from holding Stagwell or give up 1.77% of portfolio value over 90 days.

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

Stagwell  vs.  Golden Matrix Group

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.

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 Stagwell and Golden Matrix

The main advantage of trading using opposite Stagwell and Golden Matrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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 Stagwell 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.