Correlation Between Golden Star and Brookmount Explorations
Can any of the company-specific risk be diversified away by investing in both Golden Star and Brookmount Explorations 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 Golden Star and Brookmount Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Star Resource and Brookmount Explorations, you can compare the effects of market volatilities on Golden Star and Brookmount Explorations 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 Golden Star with a short position of Brookmount Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Brookmount Explorations.
Diversification Opportunities for Golden Star and Brookmount Explorations
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Brookmount is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Brookmount Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookmount Explorations and Golden Star 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 Golden Star Resource are associated (or correlated) with Brookmount Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookmount Explorations has no effect on the direction of Golden Star i.e., Golden Star and Brookmount Explorations go up and down completely randomly.
Pair Corralation between Golden Star and Brookmount Explorations
Given the investment horizon of 90 days Golden Star Resource is expected to generate 1.06 times more return on investment than Brookmount Explorations. However, Golden Star is 1.06 times more volatile than Brookmount Explorations. It trades about 0.04 of its potential returns per unit of risk. Brookmount Explorations is currently generating about 0.04 per unit of risk. If you would invest 103.00 in Golden Star Resource on November 27, 2024 and sell it today you would lose (28.00) from holding Golden Star Resource or give up 27.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Golden Star Resource vs. Brookmount Explorations
Performance |
| Timeline |
| Golden Star Resource |
| Brookmount Explorations |
Golden Star and Brookmount Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and Brookmount Explorations
The main advantage of trading using opposite Golden Star and Brookmount Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, Brookmount Explorations 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 Brookmount Explorations will offset losses from the drop in Brookmount Explorations' long position.| Golden Star vs. Warner Music Group | Golden Star vs. Idaho Strategic Resources | Golden Star vs. Black Mammoth Metals | Golden Star vs. Catalyst Metals Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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