Correlation Between Chesapeake Gold and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Chesapeake Gold 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 Chesapeake Gold and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Gold Corp and GoGold Resources, you can compare the effects of market volatilities on Chesapeake Gold 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 Chesapeake Gold with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Gold and GoGold Resources.
Diversification Opportunities for Chesapeake Gold and GoGold Resources
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chesapeake and GoGold is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Gold Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Chesapeake Gold 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 Chesapeake Gold Corp 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 Chesapeake Gold i.e., Chesapeake Gold and GoGold Resources go up and down completely randomly.
Pair Corralation between Chesapeake Gold and GoGold Resources
Assuming the 90 days horizon Chesapeake Gold Corp is expected to generate 1.94 times more return on investment than GoGold Resources. However, Chesapeake Gold is 1.94 times more volatile than GoGold Resources. It trades about 0.3 of its potential returns per unit of risk. GoGold Resources is currently generating about 0.38 per unit of risk. If you would invest 58.00 in Chesapeake Gold Corp on November 2, 2024 and sell it today you would earn a total of 24.00 from holding Chesapeake Gold Corp or generate 41.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Gold Corp vs. GoGold Resources
Performance |
| Timeline |
| Chesapeake Gold Corp |
| GoGold Resources |
Chesapeake Gold and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Gold and GoGold Resources
The main advantage of trading using opposite Chesapeake Gold and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Gold 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.| Chesapeake Gold vs. Eastern Platinum Limited | Chesapeake Gold vs. Thunder Mountain Gold | Chesapeake Gold vs. AbraSilver Resource Corp | Chesapeake Gold vs. Provenance Gold Corp |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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