This module allows you to analyze existing cross correlation between Royal Gold and NZSE. You can compare the effects of market volatilities on Royal Gold and NZSE 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 Royal Gold with a short position of NZSE. See also your portfolio center. Please also check ongoing floating volatility patterns of Royal Gold and NZSE.
|Horizon||30 Days Login to change|
Predicted Return Density
Royal Gold Inc vs. NZSE
Given the investment horizon of 30 days, Royal Gold is expected to generate 2.08 times more return on investment than NZSE. However, Royal Gold is 2.08 times more volatile than NZSE. It trades about 0.35 of its potential returns per unit of risk. NZSE is currently generating about 0.11 per unit of risk. If you would invest 10,103 in Royal Gold on July 23, 2019 and sell it today you would earn a total of 2,685 from holding Royal Gold or generate 26.58% return on investment over 30 days.
Pair Corralation between Royal Gold and NZSE
|Time Period||2 Months [change]|
Diversification Opportunities for Royal Gold and NZSE
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding Royal Gold Inc and NZSE in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on NZSE and Royal Gold 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 Royal Gold are associated (or correlated) with NZSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NZSE has no effect on the direction of Royal Gold i.e. Royal Gold and NZSE go up and down completely randomly.
See also your portfolio center. Please also try Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.