Correlation Between GGX Gold and Rover Metals
Can any of the company-specific risk be diversified away by investing in both GGX Gold and Rover Metals 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 Rover Metals 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 Rover Metals Corp, you can compare the effects of market volatilities on GGX Gold and Rover Metals 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 Rover Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GGX Gold and Rover Metals.
Diversification Opportunities for GGX Gold and Rover Metals
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between GGX and Rover is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding GGX Gold Corp and Rover Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rover Metals 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 Rover Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rover Metals Corp has no effect on the direction of GGX Gold i.e., GGX Gold and Rover Metals go up and down completely randomly.
Pair Corralation between GGX Gold and Rover Metals
Assuming the 90 days horizon GGX Gold is expected to generate 1.07 times less return on investment than Rover Metals. But when comparing it to its historical volatility, GGX Gold Corp is 1.04 times less risky than Rover Metals. It trades about 0.06 of its potential returns per unit of risk. Rover Metals Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.54 in Rover Metals Corp on August 26, 2024 and sell it today you would earn a total of 0.03 from holding Rover Metals Corp or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GGX Gold Corp vs. Rover Metals Corp
Performance |
| Timeline |
| GGX Gold Corp |
| Rover Metals Corp |
GGX Gold and Rover Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GGX Gold and Rover Metals
The main advantage of trading using opposite GGX Gold and Rover Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GGX Gold position performs unexpectedly, Rover Metals 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 Rover Metals will offset losses from the drop in Rover Metals' long position.| GGX Gold vs. Aurion Resources | GGX Gold vs. Liberty Gold Corp | GGX Gold vs. Rio2 Limited | GGX Gold vs. Orezone Gold Corp |
| Rover Metals vs. Aurion Resources | Rover Metals vs. Liberty Gold Corp | Rover Metals vs. Rio2 Limited | Rover Metals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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