Correlation Between GoldMining and Adobe

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

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

Diversification Opportunities for GoldMining and Adobe

-0.28

Correlation Coefficient

GoldMining  Adobe

Very good diversification

The 3 months correlation between GoldMining and Adobe is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and 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 GoldMining are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of GoldMining i.e., GoldMining and Adobe go up and down completely randomly.

Pair Corralation between GoldMining and Adobe

Assuming the 90 days trading horizon GoldMining is expected to under-perform the Adobe. In addition to that, GoldMining is 1.34 times more volatile than Adobe Inc. It trades about -0.07 of its total potential returns per unit of risk. Adobe Inc is currently generating about 0.07 per unit of volatility. If you would invest  1,353  in Adobe Inc on April 20, 2025 and sell it today you would earn a total of  85.00  from holding Adobe Inc or generate 6.28% return on investment over 90 days.

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

GoldMining  vs.  Adobe Inc

GoldMining

Risk-Adjusted Performance

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Adobe Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Adobe Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Adobe may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with GoldMining and Adobe

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

The idea behind GoldMining and Adobe Inc 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.