Correlation Between GGX Gold and Loncor Gold
Can any of the company-specific risk be diversified away by investing in both GGX Gold and Loncor 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 Loncor 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 Loncor Gold, you can compare the effects of market volatilities on GGX Gold and Loncor 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 Loncor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GGX Gold and Loncor Gold.
Diversification Opportunities for GGX Gold and Loncor Gold
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GGX and Loncor is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GGX Gold Corp and Loncor Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loncor Gold 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 Loncor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loncor Gold has no effect on the direction of GGX Gold i.e., GGX Gold and Loncor Gold go up and down completely randomly.
Pair Corralation between GGX Gold and Loncor Gold
If you would invest 26.00 in Loncor Gold on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Loncor Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
GGX Gold Corp vs. Loncor Gold
Performance |
| Timeline |
| GGX Gold Corp |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GGX Gold and Loncor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GGX Gold and Loncor Gold
The main advantage of trading using opposite GGX Gold and Loncor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GGX Gold position performs unexpectedly, Loncor 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 Loncor Gold will offset losses from the drop in Loncor Gold's long position.| GGX Gold vs. GFG Resources | GGX Gold vs. Klondike Gold Corp | GGX Gold vs. Jaguar Mining | GGX Gold vs. Marvel Gold Limited |
| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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