Correlation Between Bank Central and US GoldMining
Can any of the company-specific risk be diversified away by investing in both Bank Central and US GoldMining 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 Bank Central and US GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and US GoldMining Common, you can compare the effects of market volatilities on Bank Central and US GoldMining 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 Bank Central with a short position of US GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and US GoldMining.
Diversification Opportunities for Bank Central and US GoldMining
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and USGO is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and US GoldMining Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US GoldMining Common and Bank Central 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 Bank Central Asia are associated (or correlated) with US GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US GoldMining Common has no effect on the direction of Bank Central i.e., Bank Central and US GoldMining go up and down completely randomly.
Pair Corralation between Bank Central and US GoldMining
Assuming the 90 days horizon Bank Central is expected to generate 4.44 times less return on investment than US GoldMining. But when comparing it to its historical volatility, Bank Central Asia is 2.5 times less risky than US GoldMining. It trades about 0.03 of its potential returns per unit of risk. US GoldMining Common is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 879.00 in US GoldMining Common on September 1, 2025 and sell it today you would earn a total of 108.00 from holding US GoldMining Common or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. US GoldMining Common
Performance |
| Timeline |
| Bank Central Asia |
| US GoldMining Common |
Bank Central and US GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and US GoldMining
The main advantage of trading using opposite Bank Central and US GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, US GoldMining 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 US GoldMining will offset losses from the drop in US GoldMining's long position.| Bank Central vs. Nates Food Co | Bank Central vs. MTY Food Group | Bank Central vs. Verde Clean Fuels | Bank Central vs. Capital Clean Energy |
| US GoldMining vs. Pekin Life Insurance | US GoldMining vs. Selective Insurance Group | US GoldMining vs. Brandywine Realty Trust | US GoldMining vs. Universal Insurance Holdings |
Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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