Correlation Between Golden Minerals and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Golden Minerals and GoGold Resources 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 Golden Minerals and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Minerals and GoGold Resources, you can compare the effects of market volatilities on Golden Minerals and GoGold Resources 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 Golden Minerals with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Minerals and GoGold Resources.
Diversification Opportunities for Golden Minerals and GoGold Resources
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and GoGold is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Golden Minerals and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Golden Minerals 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 Golden Minerals are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Golden Minerals i.e., Golden Minerals and GoGold Resources go up and down completely randomly.
Pair Corralation between Golden Minerals and GoGold Resources
Given the investment horizon of 90 days Golden Minerals is expected to under-perform the GoGold Resources. In addition to that, Golden Minerals is 1.89 times more volatile than GoGold Resources. It trades about -0.26 of its total potential returns per unit of risk. GoGold Resources is currently generating about -0.38 per unit of volatility. If you would invest 115.00 in GoGold Resources on August 31, 2024 and sell it today you would lose (24.00) from holding GoGold Resources or give up 20.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Minerals vs. GoGold Resources
Performance |
| Timeline |
| Golden Minerals |
| GoGold Resources |
Golden Minerals and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Minerals and GoGold Resources
The main advantage of trading using opposite Golden Minerals and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Minerals position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| Golden Minerals vs. Summa Silver Corp | Golden Minerals vs. GoGold Resources | Golden Minerals vs. Scottie Resources Corp | Golden Minerals vs. Brixton Metals |
| GoGold Resources vs. Regenx Tech Corp | GoGold Resources vs. P2 Gold | GoGold Resources vs. Max Resource Corp | GoGold Resources vs. Pacific Ridge Exploration |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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