Correlation Between GoGold Resources and Austral Gold
Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Austral 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 GoGold Resources and Austral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and Austral Gold Limited, you can compare the effects of market volatilities on GoGold Resources and Austral 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 GoGold Resources with a short position of Austral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Austral Gold.
Diversification Opportunities for GoGold Resources and Austral Gold
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GoGold and Austral is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Austral Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austral Gold Limited and GoGold Resources 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 GoGold Resources are associated (or correlated) with Austral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austral Gold Limited has no effect on the direction of GoGold Resources i.e., GoGold Resources and Austral Gold go up and down completely randomly.
Pair Corralation between GoGold Resources and Austral Gold
Assuming the 90 days horizon GoGold Resources is expected to under-perform the Austral Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, GoGold Resources is 12.61 times less risky than Austral Gold. The otc stock trades about -0.35 of its potential returns per unit of risk. The Austral Gold Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1.75 in Austral Gold Limited on August 28, 2024 and sell it today you would earn a total of 0.31 from holding Austral Gold Limited or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoGold Resources vs. Austral Gold Limited
Performance |
| Timeline |
| GoGold Resources |
| Austral Gold Limited |
GoGold Resources and Austral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and Austral Gold
The main advantage of trading using opposite GoGold Resources and Austral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Austral 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 Austral Gold will offset losses from the drop in Austral Gold's long position.| GoGold Resources vs. Regenx Tech Corp | GoGold Resources vs. P2 Gold | GoGold Resources vs. Max Resource Corp | GoGold Resources vs. Pacific Ridge Exploration |
| Austral Gold vs. Gold79 Mines | Austral Gold vs. Arctic Star Exploration | Austral Gold vs. American Clean Resources | Austral Gold vs. Arras Minerals 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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