Correlation Between GoGold Resources and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Gatos Silver 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 Gatos Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and Gatos Silver, you can compare the effects of market volatilities on GoGold Resources and Gatos Silver 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 Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Gatos Silver.
Diversification Opportunities for GoGold Resources and Gatos Silver
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GoGold and Gatos is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of GoGold Resources i.e., GoGold Resources and Gatos Silver go up and down completely randomly.
Pair Corralation between GoGold Resources and Gatos Silver
Assuming the 90 days trading horizon GoGold Resources is expected to under-perform the Gatos Silver. But the stock apears to be less risky and, when comparing its historical volatility, GoGold Resources is 1.07 times less risky than Gatos Silver. The stock trades about 0.0 of its potential returns per unit of risk. The Gatos Silver is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Gatos Silver on August 31, 2024 and sell it today you would earn a total of 1,577 from holding Gatos Silver or generate 262.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
GoGold Resources vs. Gatos Silver
Performance |
| Timeline |
| GoGold Resources |
| Gatos Silver |
GoGold Resources and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and Gatos Silver
The main advantage of trading using opposite GoGold Resources and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Gatos Silver 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 Gatos Silver will offset losses from the drop in Gatos Silver'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 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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