Correlation Between Australian Strategic and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both Australian Strategic 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 Australian Strategic and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Strategic Materials and Golden Goliath Resources, you can compare the effects of market volatilities on Australian Strategic 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 Australian Strategic with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Strategic and Golden Goliath.
Diversification Opportunities for Australian Strategic and Golden Goliath
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Australian and Golden is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Australian Strategic Materials and Golden Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Goliath Resources and Australian Strategic 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 Australian Strategic Materials 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 Resources has no effect on the direction of Australian Strategic i.e., Australian Strategic and Golden Goliath go up and down completely randomly.
Pair Corralation between Australian Strategic and Golden Goliath
Assuming the 90 days horizon Australian Strategic Materials is expected to under-perform the Golden Goliath. But the pink sheet apears to be less risky and, when comparing its historical volatility, Australian Strategic Materials is 10.59 times less risky than Golden Goliath. The pink sheet trades about -0.38 of its potential returns per unit of risk. The Golden Goliath Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.10 in Golden Goliath Resources on August 29, 2024 and sell it today you would lose (1.10) from holding Golden Goliath Resources or give up 26.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Strategic Materials vs. Golden Goliath Resources
Performance |
| Timeline |
| Australian Strategic |
| Golden Goliath Resources |
Australian Strategic and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Strategic and Golden Goliath
The main advantage of trading using opposite Australian Strategic and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Strategic 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.| Australian Strategic vs. Rockridge Resources | Australian Strategic vs. Ameriwest Lithium | Australian Strategic vs. Osisko Metals Incorporated | Australian Strategic vs. Volt Lithium Corp |
| Golden Goliath vs. Rockridge Resources | Golden Goliath vs. Ameriwest Lithium | Golden Goliath vs. Osisko Metals Incorporated | Golden Goliath vs. Volt Lithium Corp |
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 the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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