Correlation Between Golden Star and US Gold
Can any of the company-specific risk be diversified away by investing in both Golden Star and US 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 Golden Star and US Gold 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 US Gold Corp, you can compare the effects of market volatilities on Golden Star and US 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 Golden Star with a short position of US Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and US Gold.
Diversification Opportunities for Golden Star and US Gold
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and USAU is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Gold Corp 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 US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of Golden Star i.e., Golden Star and US Gold go up and down completely randomly.
Pair Corralation between Golden Star and US Gold
Given the investment horizon of 90 days Golden Star Resource is expected to generate 3.22 times more return on investment than US Gold. However, Golden Star is 3.22 times more volatile than US Gold Corp. It trades about 0.03 of its potential returns per unit of risk. US Gold Corp is currently generating about 0.05 per unit of risk. If you would invest 220.00 in Golden Star Resource on August 25, 2024 and sell it today you would lose (105.00) from holding Golden Star Resource or give up 47.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Star Resource vs. US Gold Corp
Performance |
| Timeline |
| Golden Star Resource |
| US Gold Corp |
Golden Star and US Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and US Gold
The main advantage of trading using opposite Golden Star and US Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, US 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 US Gold will offset losses from the drop in US Gold'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 |
| US Gold vs. Labrador Gold Corp | US Gold vs. Aurion Resources | US Gold vs. Puma Exploration | US Gold 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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