Correlation Between Eloro Resources and Golden Star
Can any of the company-specific risk be diversified away by investing in both Eloro Resources and Golden Star 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 Eloro Resources and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eloro Resources and Golden Star Resource, you can compare the effects of market volatilities on Eloro Resources and Golden Star 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 Eloro Resources with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eloro Resources and Golden Star.
Diversification Opportunities for Eloro Resources and Golden Star
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eloro and Golden is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eloro Resources and Golden Star Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Resource and Eloro Resources 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 Eloro Resources are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Resource has no effect on the direction of Eloro Resources i.e., Eloro Resources and Golden Star go up and down completely randomly.
Pair Corralation between Eloro Resources and Golden Star
Assuming the 90 days horizon Eloro Resources is expected to generate 0.53 times more return on investment than Golden Star. However, Eloro Resources is 1.89 times less risky than Golden Star. It trades about -0.12 of its potential returns per unit of risk. Golden Star Resource is currently generating about -0.22 per unit of risk. If you would invest 75.00 in Eloro Resources on November 27, 2024 and sell it today you would lose (8.00) from holding Eloro Resources or give up 10.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eloro Resources vs. Golden Star Resource
Performance |
| Timeline |
| Eloro Resources |
| Golden Star Resource |
Eloro Resources and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eloro Resources and Golden Star
The main advantage of trading using opposite Eloro Resources and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eloro Resources position performs unexpectedly, Golden Star 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 Star will offset losses from the drop in Golden Star's long position.| Eloro Resources vs. Labrador Gold Corp | Eloro Resources vs. Lion One Metals | Eloro Resources vs. Novo Resources Corp | Eloro Resources vs. Irving Resources |
| Golden Star vs. Warner Music Group | Golden Star vs. Idaho Strategic Resources | Golden Star vs. Black Mammoth Metals | Golden Star vs. Catalyst Metals Limited |
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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