Correlation Between Golden Lake and Red Moon
Can any of the company-specific risk be diversified away by investing in both Golden Lake and Red Moon 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 Red Moon 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 Red Moon Resources, you can compare the effects of market volatilities on Golden Lake and Red Moon 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 Red Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Lake and Red Moon.
Diversification Opportunities for Golden Lake and Red Moon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Golden and Red is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Golden Lake Exploration and Red Moon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Moon 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 Red Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Moon Resources has no effect on the direction of Golden Lake i.e., Golden Lake and Red Moon go up and down completely randomly.
Pair Corralation between Golden Lake and Red Moon
Assuming the 90 days horizon Golden Lake Exploration is expected to generate 3.16 times more return on investment than Red Moon. However, Golden Lake is 3.16 times more volatile than Red Moon Resources. It trades about 0.08 of its potential returns per unit of risk. Red Moon Resources is currently generating about 0.03 per unit of risk. If you would invest 2.90 in Golden Lake Exploration on October 26, 2024 and sell it today you would earn a total of 0.37 from holding Golden Lake Exploration or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Lake Exploration vs. Red Moon Resources
Performance |
| Timeline |
| Golden Lake Exploration |
| Red Moon Resources |
Golden Lake and Red Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Lake and Red Moon
The main advantage of trading using opposite Golden Lake and Red Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Lake position performs unexpectedly, Red Moon 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 Red Moon will offset losses from the drop in Red Moon'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 |
| Red Moon vs. Aurwest Resources | Red Moon vs. Benton Resources | Red Moon vs. Pan Global Resources | Red Moon vs. Tower 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |