Correlation Between GoGold Resources and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Perseus 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 Perseus 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 Perseus Mining, you can compare the effects of market volatilities on GoGold Resources and Perseus 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Perseus Mining.
Diversification Opportunities for GoGold Resources and Perseus Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoGold and Perseus is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of GoGold Resources i.e., GoGold Resources and Perseus Mining go up and down completely randomly.
Pair Corralation between GoGold Resources and Perseus Mining
Assuming the 90 days trading horizon GoGold Resources is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, GoGold Resources is 11.93 times less risky than Perseus Mining. The stock trades about -0.3 of its potential returns per unit of risk. The Perseus Mining is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Perseus Mining on September 18, 2024 and sell it today you would earn a total of 141.00 from holding Perseus Mining or generate 138.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GoGold Resources vs. Perseus Mining
Performance |
| Timeline |
| GoGold Resources |
| Perseus Mining |
GoGold Resources and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and Perseus Mining
The main advantage of trading using opposite GoGold Resources and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Perseus 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 Perseus Mining will offset losses from the drop in Perseus 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 |
| Perseus Mining vs. Arizona Sonoran Copper | Perseus Mining vs. World Copper | Perseus Mining vs. QC Copper and |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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