Correlation Between Core Lithium and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both Core Lithium 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 Core Lithium and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Lithium and Golden Goliath Resources, you can compare the effects of market volatilities on Core Lithium 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 Core Lithium with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Lithium and Golden Goliath.
Diversification Opportunities for Core Lithium and Golden Goliath
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Core and Golden is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium 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 Core Lithium 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 Core Lithium 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 Core Lithium i.e., Core Lithium and Golden Goliath go up and down completely randomly.
Pair Corralation between Core Lithium and Golden Goliath
Assuming the 90 days horizon Core Lithium is expected to under-perform the Golden Goliath. But the pink sheet apears to be less risky and, when comparing its historical volatility, Core Lithium is 10.81 times less risky than Golden Goliath. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Golden Goliath Resources is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Golden Goliath Resources on August 31, 2024 and sell it today you would lose (4.10) from holding Golden Goliath Resources or give up 31.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.57% |
| Values | Daily Returns |
Core Lithium vs. Golden Goliath Resources
Performance |
| Timeline |
| Core Lithium |
| Golden Goliath Resources |
Core Lithium and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Lithium and Golden Goliath
The main advantage of trading using opposite Core Lithium and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Lithium 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.| Core Lithium vs. Liontown Resources Limited | Core Lithium vs. ATT Inc | Core Lithium vs. Merck Company | Core Lithium vs. Walt Disney |
| Golden Goliath vs. Silver Spruce Resources | Golden Goliath vs. Portofino Resources | Golden Goliath vs. Freegold Ventures Limited | Golden Goliath vs. Bravada Gold |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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