Correlation Between GoGold Resources and K92 Mining
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and K92 Mining 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 K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and K92 Mining, you can compare the effects of market volatilities on GoGold Resources and K92 Mining 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 K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and K92 Mining.
Diversification Opportunities for GoGold Resources and K92 Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GoGold and K92 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining 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 K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of GoGold Resources i.e., GoGold Resources and K92 Mining go up and down completely randomly.
Pair Corralation between GoGold Resources and K92 Mining
Assuming the 90 days trading horizon GoGold Resources is expected to under-perform the K92 Mining. In addition to that, GoGold Resources is 1.18 times more volatile than K92 Mining. It trades about -0.3 of its total potential returns per unit of risk. K92 Mining is currently generating about 0.01 per unit of volatility. If you would invest 894.00 in K92 Mining on September 18, 2024 and sell it today you would earn a total of 0.00 from holding K92 Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GoGold Resources vs. K92 Mining
Performance |
| Timeline |
| GoGold Resources |
| K92 Mining |
GoGold Resources and K92 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and K92 Mining
The main advantage of trading using opposite GoGold Resources and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining's long position.| GoGold Resources vs. Outcrop Gold Corp | GoGold Resources vs. Strikepoint Gold | GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Eskay Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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