Correlation Between GGX Gold and Hummingbird Resources
Can any of the company-specific risk be diversified away by investing in both GGX Gold and Hummingbird 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 GGX Gold and Hummingbird Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GGX Gold Corp and Hummingbird Resources PLC, you can compare the effects of market volatilities on GGX Gold and Hummingbird 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 GGX Gold with a short position of Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GGX Gold and Hummingbird Resources.
Diversification Opportunities for GGX Gold and Hummingbird Resources
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GGX and Hummingbird is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GGX Gold Corp and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC and GGX Gold 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 GGX Gold Corp are associated (or correlated) with Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of GGX Gold i.e., GGX Gold and Hummingbird Resources go up and down completely randomly.
Pair Corralation between GGX Gold and Hummingbird Resources
Assuming the 90 days horizon GGX Gold Corp is expected to generate 1.28 times more return on investment than Hummingbird Resources. However, GGX Gold is 1.28 times more volatile than Hummingbird Resources PLC. It trades about 0.05 of its potential returns per unit of risk. Hummingbird Resources PLC is currently generating about -0.03 per unit of risk. If you would invest 1.74 in GGX Gold Corp on September 1, 2024 and sell it today you would lose (0.49) from holding GGX Gold Corp or give up 28.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
GGX Gold Corp vs. Hummingbird Resources PLC
Performance |
| Timeline |
| GGX Gold Corp |
| Hummingbird Resources PLC |
GGX Gold and Hummingbird Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GGX Gold and Hummingbird Resources
The main advantage of trading using opposite GGX Gold and Hummingbird Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GGX Gold position performs unexpectedly, Hummingbird 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 Hummingbird Resources will offset losses from the drop in Hummingbird Resources' long position.| GGX Gold vs. Aurion Resources | GGX Gold vs. Rio2 Limited | GGX Gold vs. Palamina Corp | GGX Gold vs. BTU Metals Corp |
| Hummingbird Resources vs. Fremont Gold | Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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