Correlation Between GGX Gold and Karora Resources
Can any of the company-specific risk be diversified away by investing in both GGX Gold and Karora 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 Karora 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 Karora Resources, you can compare the effects of market volatilities on GGX Gold and Karora 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 Karora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GGX Gold and Karora Resources.
Diversification Opportunities for GGX Gold and Karora Resources
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GGX and Karora is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GGX Gold Corp and Karora Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karora Resources 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 Karora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karora Resources has no effect on the direction of GGX Gold i.e., GGX Gold and Karora Resources go up and down completely randomly.
Pair Corralation between GGX Gold and Karora Resources
Assuming the 90 days horizon GGX Gold Corp is expected to generate 5.12 times more return on investment than Karora Resources. However, GGX Gold is 5.12 times more volatile than Karora Resources. It trades about 0.04 of its potential returns per unit of risk. Karora Resources is currently generating about 0.04 per unit of risk. If you would invest 5.43 in GGX Gold Corp on October 21, 2024 and sell it today you would lose (3.69) from holding GGX Gold Corp or give up 67.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.35% |
| Values | Daily Returns |
GGX Gold Corp vs. Karora Resources
Performance |
| Timeline |
| GGX Gold Corp |
| Karora Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GGX Gold and Karora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GGX Gold and Karora Resources
The main advantage of trading using opposite GGX Gold and Karora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GGX Gold position performs unexpectedly, Karora 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 Karora Resources will offset losses from the drop in Karora Resources' long position.| GGX Gold vs. GFG Resources | GGX Gold vs. Klondike Gold Corp | GGX Gold vs. Jaguar Mining | GGX Gold vs. Marvel Gold Limited |
| Karora Resources vs. K92 Mining | Karora Resources vs. I 80 Gold Corp | Karora Resources vs. Wesdome Gold Mines | Karora Resources vs. GGX 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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