Correlation Between Golden Goliath and Liontown Resources
Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Liontown 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 Golden Goliath and Liontown Resources 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 Liontown Resources Limited, you can compare the effects of market volatilities on Golden Goliath and Liontown 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 Golden Goliath with a short position of Liontown Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Liontown Resources.
Diversification Opportunities for Golden Goliath and Liontown Resources
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Liontown is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Liontown Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontown Resources 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 Liontown Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontown Resources has no effect on the direction of Golden Goliath i.e., Golden Goliath and Liontown Resources go up and down completely randomly.
Pair Corralation between Golden Goliath and Liontown Resources
Assuming the 90 days horizon Golden Goliath Resources is expected to generate 26.19 times more return on investment than Liontown Resources. However, Golden Goliath is 26.19 times more volatile than Liontown Resources Limited. It trades about 0.21 of its potential returns per unit of risk. Liontown Resources Limited is currently generating about -0.41 per unit of risk. If you would invest 3.00 in Golden Goliath Resources on September 13, 2024 and sell it today you would lose (1.25) from holding Golden Goliath Resources or give up 41.67% 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. Liontown Resources Limited
Performance |
| Timeline |
| Golden Goliath Resources |
| Liontown Resources |
Golden Goliath and Liontown Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Goliath and Liontown Resources
The main advantage of trading using opposite Golden Goliath and Liontown Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Goliath position performs unexpectedly, Liontown 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 Liontown Resources will offset losses from the drop in Liontown Resources' long position.| Golden Goliath vs. Qubec Nickel Corp | Golden Goliath vs. IGO Limited | Golden Goliath vs. Focus Graphite | Golden Goliath vs. Mineral Res |
| Liontown Resources vs. Sayona Mining Limited | Liontown Resources vs. Core Lithium | Liontown Resources vs. Critical Elements | Liontown Resources vs. South32 ADR |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |