Correlation Between Trellidor Holdings and Gold Fields

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

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

Diversification Opportunities for Trellidor Holdings and Gold Fields

0.1

Correlation Coefficient

Trellidor Holdings  Gold Fields

Average diversification

The 3 months correlation between Trellidor and Gold is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Trellidor Holdings and Gold Fields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Trellidor Holdings 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 Trellidor Holdings are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Trellidor Holdings i.e., Trellidor Holdings and Gold Fields go up and down completely randomly.

Pair Corralation between Trellidor Holdings and Gold Fields

Assuming the 90 days trading horizon Trellidor Holdings is expected to under-perform the Gold Fields. In addition to that, Trellidor Holdings is 1.18 times more volatile than Gold Fields. It trades about -0.03 of its total potential returns per unit of risk. Gold Fields is currently generating about 0.05 per unit of volatility. If you would invest  2,406,791  in Gold Fields on September 4, 2024 and sell it today you would earn a total of  169,309  from holding Gold Fields or generate 7.03% return on investment over 90 days.

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

Trellidor Holdings  vs.  Gold Fields

Trellidor Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gold Fields

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Fields are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Gold Fields may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Trellidor Holdings and Gold Fields

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

The idea behind Trellidor Holdings and Gold Fields 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.