Correlation Between Golden Lake and Pan Global
Can any of the company-specific risk be diversified away by investing in both Golden Lake and Pan Global 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 Pan Global 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 Pan Global Resources, you can compare the effects of market volatilities on Golden Lake and Pan Global 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 Pan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Lake and Pan Global.
Diversification Opportunities for Golden Lake and Pan Global
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Pan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Golden Lake Exploration and Pan Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Global 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 Pan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Global Resources has no effect on the direction of Golden Lake i.e., Golden Lake and Pan Global go up and down completely randomly.
Pair Corralation between Golden Lake and Pan Global
Assuming the 90 days horizon Golden Lake is expected to generate 1.54 times less return on investment than Pan Global. In addition to that, Golden Lake is 1.69 times more volatile than Pan Global Resources. It trades about 0.08 of its total potential returns per unit of risk. Pan Global Resources is currently generating about 0.21 per unit of volatility. If you would invest 6.50 in Pan Global Resources on October 26, 2024 and sell it today you would earn a total of 3.38 from holding Pan Global Resources or generate 52.0% 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. Pan Global Resources
Performance |
| Timeline |
| Golden Lake Exploration |
| Pan Global Resources |
Golden Lake and Pan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Lake and Pan Global
The main advantage of trading using opposite Golden Lake and Pan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Lake position performs unexpectedly, Pan Global 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 Pan Global will offset losses from the drop in Pan Global's 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 |
| Pan Global vs. WT Offshore | Pan Global vs. Constellation Brands Class | Pan Global vs. Celsius Holdings | Pan Global vs. Xtant Medical Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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