Correlation Between Golden Goliath and Lake Resources
Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Lake 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 Lake 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 Lake Resources NL, you can compare the effects of market volatilities on Golden Goliath and Lake 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 Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Lake Resources.
Diversification Opportunities for Golden Goliath and Lake Resources
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Lake is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Lake Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Resources NL 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 Lake Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Resources NL has no effect on the direction of Golden Goliath i.e., Golden Goliath and Lake Resources go up and down completely randomly.
Pair Corralation between Golden Goliath and Lake Resources
Assuming the 90 days horizon Golden Goliath Resources is expected to generate 11.75 times more return on investment than Lake Resources. However, Golden Goliath is 11.75 times more volatile than Lake Resources NL. It trades about 0.19 of its potential returns per unit of risk. Lake Resources NL is currently generating about -0.04 per unit of risk. If you would invest 13.00 in Golden Goliath Resources on August 31, 2024 and sell it today you would lose (4.10) from holding Golden Goliath Resources or give up 31.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.57% |
| Values | Daily Returns |
Golden Goliath Resources vs. Lake Resources NL
Performance |
| Timeline |
| Golden Goliath Resources |
| Lake Resources NL |
Golden Goliath and Lake Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Goliath and Lake Resources
The main advantage of trading using opposite Golden Goliath and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Goliath position performs unexpectedly, Lake 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 Lake Resources will offset losses from the drop in Lake Resources' long position.| Golden Goliath vs. Silver Spruce Resources | Golden Goliath vs. Portofino Resources | Golden Goliath vs. Freegold Ventures Limited | Golden Goliath vs. Bravada Gold |
| Lake Resources vs. Liontown Resources Limited | Lake Resources vs. ATT Inc | Lake Resources vs. Merck Company | Lake Resources vs. Walt Disney |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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