GoldMining Net Debt vs Retained Earnings Analysis
Pair Trading with GoldMining
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if GoldMining position performs unexpectedly, the other equity 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 GoldMining will appreciate offsetting losses from the drop in the long position's value.Moving against GoldMining Stock
| 0.6 | JPM | JPMorgan Chase | PairCorr |
| 0.55 | TSLA | Tesla Inc CDR | PairCorr |
| 0.43 | AMZN | Amazon CDR | PairCorr |
| 0.33 | GOOG | Alphabet CDR | PairCorr |
The ability to find closely correlated positions to GoldMining could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace GoldMining when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back GoldMining - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling GoldMining to buy it.
The correlation of GoldMining is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as GoldMining moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if GoldMining moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for GoldMining can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in GoldMining. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in board of governors. To learn how to invest in GoldMining Stock, please use our How to Invest in GoldMining guide.You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.