Correlation Between Cassiar Gold and Goliath Resources

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Can any of the company-specific risk be diversified away by investing in both Cassiar Gold and Goliath 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 Cassiar Gold and Goliath Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cassiar Gold Corp and Goliath Resources, you can compare the effects of market volatilities on Cassiar Gold and Goliath 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 Cassiar Gold with a short position of Goliath Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cassiar Gold and Goliath Resources.

Diversification Opportunities for Cassiar Gold and Goliath Resources

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Cassiar and Goliath is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cassiar Gold Corp and Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and Cassiar 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 Cassiar Gold Corp are associated (or correlated) with Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Cassiar Gold i.e., Cassiar Gold and Goliath Resources go up and down completely randomly.

Pair Corralation between Cassiar Gold and Goliath Resources

Assuming the 90 days trading horizon Cassiar Gold Corp is expected to under-perform the Goliath Resources. But the stock apears to be less risky and, when comparing its historical volatility, Cassiar Gold Corp is 1.02 times less risky than Goliath Resources. The stock trades about -0.06 of its potential returns per unit of risk. The Goliath Resources is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  118.00  in Goliath Resources on September 1, 2024 and sell it today you would lose (4.00) from holding Goliath Resources or give up 3.39% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Cassiar Gold Corp  vs.  Goliath Resources

 Performance 
       Timeline  
Cassiar Gold Corp 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Cassiar Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Goliath Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Goliath Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Cassiar Gold and Goliath Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cassiar Gold and Goliath Resources

The main advantage of trading using opposite Cassiar Gold and Goliath Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cassiar Gold position performs unexpectedly, Goliath 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 Goliath Resources will offset losses from the drop in Goliath Resources' long position.
The idea behind Cassiar Gold Corp and Goliath Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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