Correlation Between Nestlé SA and GOLDQUEST MINING

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

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

Diversification Opportunities for Nestlé SA and GOLDQUEST MINING

-0.84

Correlation Coefficient

Nestlé SA  GOLDQUEST MINING

Pay attention - limited upside

The 3 months correlation between Nestlé and GOLDQUEST is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nestl SA and GOLDQUEST MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDQUEST MINING and Nestlé SA 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 Nestl SA are associated (or correlated) with GOLDQUEST MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDQUEST MINING has no effect on the direction of Nestlé SA i.e., Nestlé SA and GOLDQUEST MINING go up and down completely randomly.

Pair Corralation between Nestlé SA and GOLDQUEST MINING

Assuming the 90 days trading horizon Nestl SA is expected to under-perform the GOLDQUEST MINING. But the stock apears to be less risky and, when comparing its historical volatility, Nestl SA is 4.57 times less risky than GOLDQUEST MINING. The stock trades about -0.17 of its potential returns per unit of risk. The GOLDQUEST MINING is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  34.00  in GOLDQUEST MINING on April 23, 2025 and sell it today you would earn a total of  9.00  from holding GOLDQUEST MINING or generate 26.47% return on investment over 90 days.

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

Nestl SA  vs.  GOLDQUEST MINING

Nestlé SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nestl SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

GOLDQUEST MINING

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDQUEST MINING are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GOLDQUEST MINING unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nestlé SA and GOLDQUEST MINING

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

The idea behind Nestl SA and GOLDQUEST MINING 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.