Correlation Between Golden Goliath and Leading Edge
Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Leading Edge 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 Leading Edge 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 Leading Edge Materials, you can compare the effects of market volatilities on Golden Goliath and Leading Edge 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 Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Leading Edge.
Diversification Opportunities for Golden Goliath and Leading Edge
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Leading is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Leading Edge Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leading Edge Materials 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 Leading Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leading Edge Materials has no effect on the direction of Golden Goliath i.e., Golden Goliath and Leading Edge go up and down completely randomly.
Pair Corralation between Golden Goliath and Leading Edge
Assuming the 90 days horizon Golden Goliath Resources is expected to generate 16.11 times more return on investment than Leading Edge. However, Golden Goliath is 16.11 times more volatile than Leading Edge Materials. It trades about 0.2 of its potential returns per unit of risk. Leading Edge Materials is currently generating about -0.05 per unit of risk. If you would invest 9.00 in Golden Goliath Resources on August 25, 2024 and sell it today you would lose (3.00) from holding Golden Goliath Resources or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.33% |
| Values | Daily Returns |
Golden Goliath Resources vs. Leading Edge Materials
Performance |
| Timeline |
| Golden Goliath Resources |
| Leading Edge Materials |
Golden Goliath and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Goliath and Leading Edge
The main advantage of trading using opposite Golden Goliath and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Goliath position performs unexpectedly, Leading Edge 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 Leading Edge will offset losses from the drop in Leading Edge's long position.| Golden Goliath vs. Silver Spruce Resources | Golden Goliath vs. Portofino Resources | Golden Goliath vs. Freegold Ventures Limited | Golden Goliath vs. Bravada Gold |
| Leading Edge vs. Ascendant Resources | Leading Edge vs. Cantex Mine Development | Leading Edge vs. Amarc Resources | Leading Edge vs. Sterling Metals 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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