Correlation Between Golden Lake and Surge Battery
Can any of the company-specific risk be diversified away by investing in both Golden Lake and Surge Battery 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 Surge Battery 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 Surge Battery Metals, you can compare the effects of market volatilities on Golden Lake and Surge Battery 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 Surge Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Lake and Surge Battery.
Diversification Opportunities for Golden Lake and Surge Battery
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Surge is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Golden Lake Exploration and Surge Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Battery Metals 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 Surge Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Battery Metals has no effect on the direction of Golden Lake i.e., Golden Lake and Surge Battery go up and down completely randomly.
Pair Corralation between Golden Lake and Surge Battery
Assuming the 90 days horizon Golden Lake Exploration is expected to generate 1.49 times more return on investment than Surge Battery. However, Golden Lake is 1.49 times more volatile than Surge Battery Metals. It trades about 0.02 of its potential returns per unit of risk. Surge Battery Metals is currently generating about 0.03 per unit of risk. If you would invest 7.60 in Golden Lake Exploration on September 3, 2024 and sell it today you would lose (4.68) from holding Golden Lake Exploration or give up 61.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Lake Exploration vs. Surge Battery Metals
Performance |
| Timeline |
| Golden Lake Exploration |
| Surge Battery Metals |
Golden Lake and Surge Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Lake and Surge Battery
The main advantage of trading using opposite Golden Lake and Surge Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Lake position performs unexpectedly, Surge Battery 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 Surge Battery will offset losses from the drop in Surge Battery's long position.| Golden Lake vs. Qubec Nickel Corp | Golden Lake vs. IGO Limited | Golden Lake vs. Avarone Metals | Golden Lake vs. Adriatic Metals PLC |
| Surge Battery vs. Nevada Sunrise Gold | Surge Battery vs. Critical Elements | Surge Battery vs. Lithium Ionic Corp | Surge Battery vs. Green Technology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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