Correlation Between Golden Goliath and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Klondike 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 Goliath and Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Goliath Resources and Klondike Gold Corp, you can compare the effects of market volatilities on Golden Goliath and Klondike 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 Goliath with a short position of Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Klondike Gold.
Diversification Opportunities for Golden Goliath and Klondike Gold
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Klondike is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp and Golden Goliath 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 Goliath Resources are associated (or correlated) with Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Golden Goliath i.e., Golden Goliath and Klondike Gold go up and down completely randomly.
Pair Corralation between Golden Goliath and Klondike Gold
Assuming the 90 days horizon Golden Goliath Resources is expected to under-perform the Klondike Gold. But the stock apears to be less risky and, when comparing its historical volatility, Golden Goliath Resources is 1.11 times less risky than Klondike Gold. The stock trades about -0.21 of its potential returns per unit of risk. The Klondike Gold Corp is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Klondike Gold Corp on August 29, 2024 and sell it today you would lose (1.50) from holding Klondike Gold Corp or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Goliath Resources vs. Klondike Gold Corp
Performance |
| Timeline |
| Golden Goliath Resources |
| Klondike Gold Corp |
Golden Goliath and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Goliath and Klondike Gold
The main advantage of trading using opposite Golden Goliath and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Goliath position performs unexpectedly, Klondike 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.| Golden Goliath vs. First Majestic Silver | Golden Goliath vs. Ivanhoe Energy | Golden Goliath vs. Orezone Gold Corp | Golden Goliath vs. Faraday Copper 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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