Correlation Between Golden Lake and Hudson Resources
Can any of the company-specific risk be diversified away by investing in both Golden Lake and Hudson 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 Hudson 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 Hudson Resources, you can compare the effects of market volatilities on Golden Lake and Hudson 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 Hudson Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Lake and Hudson Resources.
Diversification Opportunities for Golden Lake and Hudson Resources
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Hudson is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Golden Lake Exploration and Hudson Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson 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 Hudson Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Resources has no effect on the direction of Golden Lake i.e., Golden Lake and Hudson Resources go up and down completely randomly.
Pair Corralation between Golden Lake and Hudson Resources
Assuming the 90 days horizon Golden Lake Exploration is expected to under-perform the Hudson Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Golden Lake Exploration is 3.36 times less risky than Hudson Resources. The otc stock trades about -0.08 of its potential returns per unit of risk. The Hudson Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Hudson Resources on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Hudson Resources or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Golden Lake Exploration vs. Hudson Resources
Performance |
| Timeline |
| Golden Lake Exploration |
| Hudson Resources |
Golden Lake and Hudson Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Lake and Hudson Resources
The main advantage of trading using opposite Golden Lake and Hudson Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Lake position performs unexpectedly, Hudson 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 Hudson Resources will offset losses from the drop in Hudson 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 |
| Hudson Resources vs. Macmahon Holdings Limited | Hudson Resources vs. Rokmaster Resources Corp | Hudson Resources vs. Thunder Gold Corp | Hudson Resources vs. Prime Meridian Resources |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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