Correlation Between Gold Road and Polyus PAO

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

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

Diversification Opportunities for Gold Road and Polyus PAO

0.0

Correlation Coefficient

Gold Road  Polyus PAO

Pay attention - limited upside

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

Pair Corralation between Gold Road and Polyus PAO

If you would invest  107.00  in Gold Road Resources on February 4, 2024 and sell it today you would earn a total of  1.00  from holding Gold Road Resources or generate 0.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Gold Road Resources  vs.  Polyus PAO ADR

Gold Road Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.

Polyus PAO ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polyus PAO ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Polyus PAO is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gold Road and Polyus PAO

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

The idea behind Gold Road Resources and Polyus PAO ADR 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.