Correlation Between GoGold Resources and AbraSilver Resource
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and AbraSilver Resource 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 GoGold Resources and AbraSilver Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and AbraSilver Resource Corp, you can compare the effects of market volatilities on GoGold Resources and AbraSilver Resource 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 GoGold Resources with a short position of AbraSilver Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and AbraSilver Resource.
Diversification Opportunities for GoGold Resources and AbraSilver Resource
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GoGold and AbraSilver is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp and GoGold 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 GoGold Resources are associated (or correlated) with AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of GoGold Resources i.e., GoGold Resources and AbraSilver Resource go up and down completely randomly.
Pair Corralation between GoGold Resources and AbraSilver Resource
Assuming the 90 days trading horizon GoGold Resources is expected to generate 2.29 times less return on investment than AbraSilver Resource. But when comparing it to its historical volatility, GoGold Resources is 1.11 times less risky than AbraSilver Resource. It trades about 0.06 of its potential returns per unit of risk. AbraSilver Resource Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 138.00 in AbraSilver Resource Corp on August 25, 2024 and sell it today you would earn a total of 149.00 from holding AbraSilver Resource Corp or generate 107.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoGold Resources vs. AbraSilver Resource Corp
Performance |
| Timeline |
| GoGold Resources |
| AbraSilver Resource Corp |
GoGold Resources and AbraSilver Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and AbraSilver Resource
The main advantage of trading using opposite GoGold Resources and AbraSilver Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, AbraSilver Resource 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 AbraSilver Resource will offset losses from the drop in AbraSilver Resource's long position.| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. Santacruz Silv | AbraSilver Resource vs. Guanajuato Silver | AbraSilver Resource vs. Aftermath Silver |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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