Correlation Between Golden Lake and Benton Resources
Can any of the company-specific risk be diversified away by investing in both Golden Lake and Benton Resources 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 Lake and Benton Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Lake Exploration and Benton Resources, you can compare the effects of market volatilities on Golden Lake and Benton Resources 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 Lake with a short position of Benton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Lake and Benton Resources.
Diversification Opportunities for Golden Lake and Benton Resources
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Benton is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Golden Lake Exploration and Benton Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benton Resources and Golden Lake 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 Lake Exploration are associated (or correlated) with Benton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benton Resources has no effect on the direction of Golden Lake i.e., Golden Lake and Benton Resources go up and down completely randomly.
Pair Corralation between Golden Lake and Benton Resources
Assuming the 90 days horizon Golden Lake is expected to generate 2.28 times less return on investment than Benton Resources. But when comparing it to its historical volatility, Golden Lake Exploration is 1.61 times less risky than Benton Resources. It trades about 0.08 of its potential returns per unit of risk. Benton Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Benton Resources on October 26, 2024 and sell it today you would earn a total of 1.81 from holding Benton Resources or generate 30.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Golden Lake Exploration vs. Benton Resources
Performance |
| Timeline |
| Golden Lake Exploration |
| Benton Resources |
Golden Lake and Benton Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Lake and Benton Resources
The main advantage of trading using opposite Golden Lake and Benton Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Lake position performs unexpectedly, Benton Resources 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 Benton Resources will offset losses from the drop in Benton Resources' long position.| Golden Lake vs. Prime Meridian Resources | Golden Lake vs. Macmahon Holdings Limited | Golden Lake vs. Rokmaster Resources Corp | Golden Lake vs. Hudson Resources |
| Benton Resources vs. Aurelia Metals Limited | Benton Resources vs. Artemis Resources | Benton Resources vs. Ascendant Resources | Benton Resources vs. Altiplano Metals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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