Correlation Between Baker Hughes and Golden Goliath

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Can any of the company-specific risk be diversified away by investing in both Baker Hughes and Golden Goliath 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 Baker Hughes and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Hughes A and Golden Goliath Res, you can compare the effects of market volatilities on Baker Hughes and Golden Goliath 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 Baker Hughes with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Golden Goliath.

Diversification Opportunities for Baker Hughes and Golden Goliath

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Baker and Golden is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes A and Golden Goliath Res in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Goliath Res and Baker Hughes 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 Baker Hughes A are associated (or correlated) with Golden Goliath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Goliath Res has no effect on the direction of Baker Hughes i.e., Baker Hughes and Golden Goliath go up and down completely randomly.

Pair Corralation between Baker Hughes and Golden Goliath

Considering the 90-day investment horizon Baker Hughes A is expected to under-perform the Golden Goliath. But the stock apears to be less risky and, when comparing its historical volatility, Baker Hughes A is 8.33 times less risky than Golden Goliath. The stock trades about -0.37 of its potential returns per unit of risk. The Golden Goliath Res is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Golden Goliath Res on March 26, 2022 and sell it today you would earn a total of  0.40  from holding Golden Goliath Res or generate 11.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Baker Hughes A  vs.  Golden Goliath Res

 Performance (%) 
      Timeline 
Baker Hughes A 
Baker Performance
0 of 100
Over the last 90 days Baker Hughes A has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in July 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.024
Payout Ratio
1.09
Forward Annual Dividend Rate
0.72
Dividend Date
2022-06-10
Ex Dividend Date
2022-05-27

Baker Price Channel

Golden Goliath Res 
Golden Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Golden Goliath Res are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Golden Goliath exhibited solid returns over the last few months and may actually be approaching a breakup point.

Golden Price Channel

Baker Hughes and Golden Goliath Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Baker Hughes and Golden Goliath

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

Baker Hughes A

Pair trading matchups for Baker Hughes

The idea behind Baker Hughes A and Golden Goliath Res 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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