Correlation Between Gold Road and TRAVEL +

Can any of the company-specific risk be diversified away by investing in both Gold Road and TRAVEL + 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 TRAVEL + 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 TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on Gold Road and TRAVEL + 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 TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and TRAVEL +.

Diversification Opportunities for Gold Road and TRAVEL +

0.1

Correlation Coefficient

Gold Road  TRAVEL +

Average diversification

The 3 months correlation between Gold and TRAVEL is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL 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 TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of Gold Road i.e., Gold Road and TRAVEL + go up and down completely randomly.

Pair Corralation between Gold Road and TRAVEL +

Assuming the 90 days horizon Gold Road Resources is expected to under-perform the TRAVEL +. In addition to that, Gold Road is 1.13 times more volatile than TRAVEL LEISURE DL 01. It trades about -0.03 of its total potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.31 per unit of volatility. If you would invest  3,500  in TRAVEL LEISURE DL 01 on April 18, 2025 and sell it today you would earn a total of  1,440  from holding TRAVEL LEISURE DL 01 or generate 41.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gold Road Resources  vs.  TRAVEL LEISURE DL 01

Gold Road Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gold Road Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gold Road is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

TRAVEL LEISURE DL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gold Road and TRAVEL +

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

The idea behind Gold Road Resources and TRAVEL LEISURE DL 01 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.