Correlation Between GoGold Resources and Terreno Resources
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Terreno Resources 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 Terreno Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and Terreno Resources Corp, you can compare the effects of market volatilities on GoGold Resources and Terreno Resources 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 Terreno Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Terreno Resources.
Diversification Opportunities for GoGold Resources and Terreno Resources
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GoGold and Terreno is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Terreno Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Resources 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 Terreno Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Resources Corp has no effect on the direction of GoGold Resources i.e., GoGold Resources and Terreno Resources go up and down completely randomly.
Pair Corralation between GoGold Resources and Terreno Resources
Assuming the 90 days trading horizon GoGold Resources is expected to under-perform the Terreno Resources. But the stock apears to be less risky and, when comparing its historical volatility, GoGold Resources is 6.11 times less risky than Terreno Resources. The stock trades about 0.0 of its potential returns per unit of risk. The Terreno Resources Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Terreno Resources Corp on September 3, 2024 and sell it today you would lose (1.00) from holding Terreno Resources Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoGold Resources vs. Terreno Resources Corp
Performance |
| Timeline |
| GoGold Resources |
| Terreno Resources Corp |
GoGold Resources and Terreno Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and Terreno Resources
The main advantage of trading using opposite GoGold Resources and Terreno Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Terreno Resources 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 Terreno Resources will offset losses from the drop in Terreno Resources' long position.| GoGold Resources vs. Algoma Steel Group | GoGold Resources vs. Champion Iron | GoGold Resources vs. International Zeolite Corp | GoGold Resources vs. European Residential Real |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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