Correlation Between Golden Goliath and Australian Strategic
Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Australian Strategic 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 Golden Goliath and Australian Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Goliath Resources and Australian Strategic Materials, you can compare the effects of market volatilities on Golden Goliath and Australian Strategic 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 Golden Goliath with a short position of Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Australian Strategic.
Diversification Opportunities for Golden Goliath and Australian Strategic
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Australian is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic and Golden Goliath 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 Golden Goliath Resources are associated (or correlated) with Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of Golden Goliath i.e., Golden Goliath and Australian Strategic go up and down completely randomly.
Pair Corralation between Golden Goliath and Australian Strategic
Assuming the 90 days horizon Golden Goliath Resources is expected to generate 10.59 times more return on investment than Australian Strategic. However, Golden Goliath is 10.59 times more volatile than Australian Strategic Materials. It trades about 0.11 of its potential returns per unit of risk. Australian Strategic Materials is currently generating about -0.38 per unit of risk. If you would invest 4.10 in Golden Goliath Resources on August 29, 2024 and sell it today you would lose (1.10) from holding Golden Goliath Resources or give up 26.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Goliath Resources vs. Australian Strategic Materials
Performance |
| Timeline |
| Golden Goliath Resources |
| Australian Strategic |
Golden Goliath and Australian Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Goliath and Australian Strategic
The main advantage of trading using opposite Golden Goliath and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Goliath position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.| Golden Goliath vs. Rockridge Resources | Golden Goliath vs. Ameriwest Lithium | Golden Goliath vs. Osisko Metals Incorporated | Golden Goliath vs. Volt Lithium Corp |
| Australian Strategic vs. Rockridge Resources | Australian Strategic vs. Ameriwest Lithium | Australian Strategic vs. Osisko Metals Incorporated | Australian Strategic vs. Volt Lithium 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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