Correlation Between Golden Goliath and Edison Cobalt
Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Edison Cobalt 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 Edison Cobalt 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 Edison Cobalt Corp, you can compare the effects of market volatilities on Golden Goliath and Edison Cobalt 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 Edison Cobalt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Edison Cobalt.
Diversification Opportunities for Golden Goliath and Edison Cobalt
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Edison is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Edison Cobalt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Cobalt Corp 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 Edison Cobalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Cobalt Corp has no effect on the direction of Golden Goliath i.e., Golden Goliath and Edison Cobalt go up and down completely randomly.
Pair Corralation between Golden Goliath and Edison Cobalt
Assuming the 90 days horizon Golden Goliath Resources is expected to generate 5.87 times more return on investment than Edison Cobalt. However, Golden Goliath is 5.87 times more volatile than Edison Cobalt Corp. It trades about 0.11 of its potential returns per unit of risk. Edison Cobalt Corp is currently generating about -0.11 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 | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Golden Goliath Resources vs. Edison Cobalt Corp
Performance |
| Timeline |
| Golden Goliath Resources |
| Edison Cobalt Corp |
Golden Goliath and Edison Cobalt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Goliath and Edison Cobalt
The main advantage of trading using opposite Golden Goliath and Edison Cobalt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Goliath position performs unexpectedly, Edison Cobalt 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 Edison Cobalt will offset losses from the drop in Edison Cobalt'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 |
| Edison Cobalt vs. Rockridge Resources | Edison Cobalt vs. Ameriwest Lithium | Edison Cobalt vs. Osisko Metals Incorporated | Edison Cobalt 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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