Correlation Between Golden Metal and Travel +

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

By analyzing existing cross correlation between Golden Metal Resources and Travel Leisure Co, you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of Travel +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Travel +.

Diversification Opportunities for Golden Metal and Travel +

0.82

Correlation Coefficient

Golden Metal  Travel +

Very poor diversification

The 3 months correlation between Golden and Travel is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Travel Leisure Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Leisure and Golden Metal 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 Golden Metal 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 has no effect on the direction of Golden Metal i.e., Golden Metal and Travel + go up and down completely randomly.

Pair Corralation between Golden Metal and Travel +

Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 31.56 times more return on investment than Travel +. However, Golden Metal is 31.56 times more volatile than Travel Leisure Co. It trades about 0.25 of its potential returns per unit of risk. Travel Leisure Co is currently generating about 0.13 per unit of risk. If you would invest  3,700  in Golden Metal Resources on April 25, 2025 and sell it today you would earn a total of  2,800  from holding Golden Metal Resources or generate 75.68% return on investment over 90 days.

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

Golden Metal Resources  vs.  Travel Leisure Co

Golden Metal Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Metal Resources are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Golden Metal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Travel Leisure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Travel Leisure Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Travel + is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Golden Metal and Travel +

The main advantage of trading using opposite Golden Metal and Travel + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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 Golden Metal Resources and Travel Leisure Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.