Correlation Between Bell Copper and Goliath Resources
Can any of the company-specific risk be diversified away by investing in both Bell Copper and Goliath 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 Bell Copper and Goliath Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Copper Corp and Goliath Resources, you can compare the effects of market volatilities on Bell Copper and Goliath 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 Bell Copper with a short position of Goliath Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Copper and Goliath Resources.
Diversification Opportunities for Bell Copper and Goliath Resources
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bell and Goliath is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bell Copper Corp and Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and Bell Copper 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 Bell Copper Corp are associated (or correlated) with Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Bell Copper i.e., Bell Copper and Goliath Resources go up and down completely randomly.
Pair Corralation between Bell Copper and Goliath Resources
Assuming the 90 days horizon Bell Copper Corp is expected to under-perform the Goliath Resources. In addition to that, Bell Copper is 3.82 times more volatile than Goliath Resources. It trades about -0.09 of its total potential returns per unit of risk. Goliath Resources is currently generating about 0.06 per unit of volatility. If you would invest 109.00 in Goliath Resources on September 15, 2024 and sell it today you would earn a total of 3.00 from holding Goliath Resources or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bell Copper Corp vs. Goliath Resources
Performance |
| Timeline |
| Bell Copper Corp |
| Goliath Resources |
Bell Copper and Goliath Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Copper and Goliath Resources
The main advantage of trading using opposite Bell Copper and Goliath Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Copper position performs unexpectedly, Goliath 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 Goliath Resources will offset losses from the drop in Goliath Resources' long position.| Bell Copper vs. Pacific Ridge Exploration | Bell Copper vs. BCM Resources Corp | Bell Copper vs. Dore Copper Mining | Bell Copper vs. Goliath Resources |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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