Correlation Between GGX Gold and Lion One
Can any of the company-specific risk be diversified away by investing in both GGX Gold and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on GGX Gold and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of GGX Gold and Lion One.
Diversification Opportunities for GGX Gold and Lion One
Modest diversification
The 3 months correlation between GGX and Lion is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GGX Gold Corp and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of GGX Gold i.e., GGX Gold and Lion One go up and down completely randomly.
Pair Corralation between GGX Gold and Lion One
Assuming the 90 days horizon GGX Gold Corp is expected to generate 3.25 times more return on investment than Lion One. However, GGX Gold is 3.25 times more volatile than Lion One Metals. It trades about 0.05 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.05 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. Lion One Metals
Performance |
| Timeline |
| GGX Gold Corp |
| Lion One Metals |
GGX Gold and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GGX Gold and Lion One
The main advantage of trading using opposite GGX Gold and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GGX Gold position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| GGX Gold vs. Aurion Resources | GGX Gold vs. Rio2 Limited | GGX Gold vs. Palamina Corp | GGX Gold vs. BTU Metals Corp |
| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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