Correlation Between US GoldMining and Ball

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

By analyzing existing cross correlation between US GoldMining Common and Ball Corporation, you can compare the effects of market volatilities on US GoldMining and Ball 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 US GoldMining with a short position of Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of US GoldMining and Ball.

Diversification Opportunities for US GoldMining and Ball

0.0

Correlation Coefficient

US GoldMining  Ball

Pay attention - limited upside

The 3 months correlation between USGO and Ball is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US GoldMining Common and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and US GoldMining 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 US GoldMining Common are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of US GoldMining i.e., US GoldMining and Ball go up and down completely randomly.

Pair Corralation between US GoldMining and Ball

If you would invest (100.00) in Ball Corporation on February 16, 2024 and sell it today you would earn a total of  100.00  from holding Ball Corporation or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

US GoldMining Common  vs.  Ball Corp.

US GoldMining Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US GoldMining Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, US GoldMining is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Ball

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ball Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Ball is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with US GoldMining and Ball

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

The idea behind US GoldMining Common and Ball Corporation 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.