Correlation Between GoGold Resources and Outcrop Gold
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Outcrop Gold 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 Outcrop Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and Outcrop Gold Corp, you can compare the effects of market volatilities on GoGold Resources and Outcrop Gold 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 Outcrop Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Outcrop Gold.
Diversification Opportunities for GoGold Resources and Outcrop Gold
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GoGold and Outcrop is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Outcrop Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outcrop Gold 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 Outcrop Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outcrop Gold Corp has no effect on the direction of GoGold Resources i.e., GoGold Resources and Outcrop Gold go up and down completely randomly.
Pair Corralation between GoGold Resources and Outcrop Gold
Assuming the 90 days trading horizon GoGold Resources is expected to generate 0.58 times more return on investment than Outcrop Gold. However, GoGold Resources is 1.71 times less risky than Outcrop Gold. It trades about -0.2 of its potential returns per unit of risk. Outcrop Gold Corp is currently generating about -0.12 per unit of risk. If you would invest 128.00 in GoGold Resources on September 19, 2024 and sell it today you would lose (14.00) from holding GoGold Resources or give up 10.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoGold Resources vs. Outcrop Gold Corp
Performance |
| Timeline |
| GoGold Resources |
| Outcrop Gold Corp |
GoGold Resources and Outcrop Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and Outcrop Gold
The main advantage of trading using opposite GoGold Resources and Outcrop Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Outcrop Gold 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 Outcrop Gold will offset losses from the drop in Outcrop Gold'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 |
| Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Defiance Silver Corp | Outcrop Gold vs. Eskay Mining Corp | Outcrop Gold vs. Stillwater Critical Minerals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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