Correlation Between COMPUTERSHARE and GOLD FIELDS

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

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

Diversification Opportunities for COMPUTERSHARE and GOLD FIELDS

-0.17

Correlation Coefficient

COMPUTERSHARE  GOLD FIELDS

Good diversification

The 3 months correlation between COMPUTERSHARE and GOLD is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTERSHARE and GOLD FIELDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD FIELDS and COMPUTERSHARE 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 COMPUTERSHARE are associated (or correlated) with GOLD FIELDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD FIELDS has no effect on the direction of COMPUTERSHARE i.e., COMPUTERSHARE and GOLD FIELDS go up and down completely randomly.

Pair Corralation between COMPUTERSHARE and GOLD FIELDS

Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 0.54 times more return on investment than GOLD FIELDS. However, COMPUTERSHARE is 1.85 times less risky than GOLD FIELDS. It trades about 0.1 of its potential returns per unit of risk. GOLD FIELDS is currently generating about 0.0 per unit of risk. If you would invest  2,100  in COMPUTERSHARE on April 22, 2025 and sell it today you would earn a total of  200.00  from holding COMPUTERSHARE or generate 9.52% return on investment over 90 days.

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

COMPUTERSHARE  vs.  GOLD FIELDS

COMPUTERSHARE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, COMPUTERSHARE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

GOLD FIELDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOLD FIELDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, GOLD FIELDS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with COMPUTERSHARE and GOLD FIELDS

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

The idea behind COMPUTERSHARE and GOLD FIELDS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.