Correlation Between Geodrill and Winsome Resources
Can any of the company-specific risk be diversified away by investing in both Geodrill and Winsome 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 Geodrill and Winsome Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geodrill Limited and Winsome Resources Limited, you can compare the effects of market volatilities on Geodrill and Winsome 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 Geodrill with a short position of Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geodrill and Winsome Resources.
Diversification Opportunities for Geodrill and Winsome Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geodrill and Winsome is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Geodrill Limited and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome Resources and Geodrill 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 Geodrill Limited are associated (or correlated) with Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Geodrill i.e., Geodrill and Winsome Resources go up and down completely randomly.
Pair Corralation between Geodrill and Winsome Resources
Assuming the 90 days horizon Geodrill Limited is expected to generate 0.37 times more return on investment than Winsome Resources. However, Geodrill Limited is 2.67 times less risky than Winsome Resources. It trades about 0.09 of its potential returns per unit of risk. Winsome Resources Limited is currently generating about -0.09 per unit of risk. If you would invest 160.00 in Geodrill Limited on September 3, 2024 and sell it today you would earn a total of 45.00 from holding Geodrill Limited or generate 28.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geodrill Limited vs. Winsome Resources Limited
Performance |
| Timeline |
| Geodrill Limited |
| Winsome Resources |
Geodrill and Winsome Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geodrill and Winsome Resources
The main advantage of trading using opposite Geodrill and Winsome Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geodrill position performs unexpectedly, Winsome 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 Winsome Resources will offset losses from the drop in Winsome Resources' long position.| Geodrill vs. Macmahon Holdings Limited | Geodrill vs. Rokmaster Resources Corp | Geodrill vs. Hudson Resources | Geodrill vs. Thunder Gold Corp |
| Winsome Resources vs. Visteon Corp | Winsome Resources vs. Zane Interactive Publishing | Winsome Resources vs. Acco Brands | Winsome Resources vs. Lucid Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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