Correlation Between Golden Star and Contango ORE
Can any of the company-specific risk be diversified away by investing in both Golden Star and Contango ORE 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 Contango ORE 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 Contango ORE, you can compare the effects of market volatilities on Golden Star and Contango ORE 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 Contango ORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Contango ORE.
Diversification Opportunities for Golden Star and Contango ORE
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Contango is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE 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 Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Golden Star i.e., Golden Star and Contango ORE go up and down completely randomly.
Pair Corralation between Golden Star and Contango ORE
Given the investment horizon of 90 days Golden Star Resource is expected to generate 3.39 times more return on investment than Contango ORE. However, Golden Star is 3.39 times more volatile than Contango ORE. It trades about 0.06 of its potential returns per unit of risk. Contango ORE is currently generating about 0.03 per unit of risk. If you would invest 51.00 in Golden Star Resource on August 27, 2024 and sell it today you would earn a total of 64.00 from holding Golden Star Resource or generate 125.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Star Resource vs. Contango ORE
Performance |
| Timeline |
| Golden Star Resource |
| Contango ORE |
Golden Star and Contango ORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and Contango ORE
The main advantage of trading using opposite Golden Star and Contango ORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, Contango ORE 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 Contango ORE will offset losses from the drop in Contango ORE's long position.| Golden Star vs. Itron Inc | Golden Star vs. Omega Healthcare Investors | Golden Star vs. Blacksky Technology | Golden Star vs. Red Cat Holdings |
| Contango ORE vs. Labrador Gold Corp | Contango ORE vs. Aurion Resources | Contango ORE vs. Puma Exploration | Contango ORE vs. Golden Star Resource |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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