Correlation Between Faraday Copper and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both Faraday Copper 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 Faraday Copper and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and Golden Goliath Resources, you can compare the effects of market volatilities on Faraday Copper 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 Faraday Copper with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Golden Goliath.
Diversification Opportunities for Faraday Copper and Golden Goliath
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Faraday and Golden is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp 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 Faraday 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 Faraday Copper Corp 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 Faraday Copper i.e., Faraday Copper and Golden Goliath go up and down completely randomly.
Pair Corralation between Faraday Copper and Golden Goliath
Assuming the 90 days trading horizon Faraday Copper is expected to generate 3.9 times less return on investment than Golden Goliath. But when comparing it to its historical volatility, Faraday Copper Corp is 2.79 times less risky than Golden Goliath. It trades about 0.02 of its potential returns per unit of risk. Golden Goliath Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Golden Goliath Resources on August 26, 2024 and sell it today you would lose (2.00) from holding Golden Goliath Resources or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Golden Goliath Resources
Performance |
| Timeline |
| Faraday Copper Corp |
| Golden Goliath Resources |
Faraday Copper and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Golden Goliath
The main advantage of trading using opposite Faraday Copper and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper 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.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
| Golden Goliath vs. First Majestic Silver | Golden Goliath vs. Ivanhoe Energy | Golden Goliath vs. Orezone Gold Corp | Golden Goliath vs. Faraday Copper Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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