Correlation Between GGX Gold and Japan Gold
Can any of the company-specific risk be diversified away by investing in both GGX Gold and Japan Gold 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 Japan Gold 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 Japan Gold Corp, you can compare the effects of market volatilities on GGX Gold and Japan Gold 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 Japan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GGX Gold and Japan Gold.
Diversification Opportunities for GGX Gold and Japan Gold
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GGX and Japan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GGX Gold Corp and Japan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Gold Corp 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 Japan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Gold Corp has no effect on the direction of GGX Gold i.e., GGX Gold and Japan Gold go up and down completely randomly.
Pair Corralation between GGX Gold and Japan Gold
Assuming the 90 days horizon GGX Gold Corp is expected to generate 2.34 times more return on investment than Japan Gold. However, GGX Gold is 2.34 times more volatile than Japan Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Japan Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 5.45 in GGX Gold Corp on August 26, 2024 and sell it today you would lose (3.63) from holding GGX Gold Corp or give up 66.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GGX Gold Corp vs. Japan Gold Corp
Performance |
| Timeline |
| GGX Gold Corp |
| Japan Gold Corp |
GGX Gold and Japan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GGX Gold and Japan Gold
The main advantage of trading using opposite GGX Gold and Japan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GGX Gold position performs unexpectedly, Japan Gold 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 Japan Gold will offset losses from the drop in Japan Gold's long position.| GGX Gold vs. Aurion Resources | GGX Gold vs. Liberty Gold Corp | GGX Gold vs. Rio2 Limited | GGX Gold vs. Orezone Gold Corp |
| Japan Gold vs. Aurion Resources | Japan Gold vs. Liberty Gold Corp | Japan Gold vs. Rio2 Limited | Japan Gold vs. Orezone 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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