Correlation Between Gold Road and Djerriwarrh Investments

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Can any of the company-specific risk be diversified away by investing in both Gold Road and Djerriwarrh Investments 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 Gold Road and Djerriwarrh Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and Djerriwarrh Investments, you can compare the effects of market volatilities on Gold Road and Djerriwarrh Investments 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 Gold Road with a short position of Djerriwarrh Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Djerriwarrh Investments.

Diversification Opportunities for Gold Road and Djerriwarrh Investments

GoldDjerriwarrhDiversified AwayGoldDjerriwarrhDiversified Away100%
0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Gold and Djerriwarrh is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Djerriwarrh Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djerriwarrh Investments and Gold Road 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 Gold Road Resources are associated (or correlated) with Djerriwarrh Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djerriwarrh Investments has no effect on the direction of Gold Road i.e., Gold Road and Djerriwarrh Investments go up and down completely randomly.

Pair Corralation between Gold Road and Djerriwarrh Investments

Assuming the 90 days trading horizon Gold Road Resources is expected to generate 3.44 times more return on investment than Djerriwarrh Investments. However, Gold Road is 3.44 times more volatile than Djerriwarrh Investments. It trades about 0.05 of its potential returns per unit of risk. Djerriwarrh Investments is currently generating about 0.05 per unit of risk. If you would invest  153.00  in Gold Road Resources on October 31, 2024 and sell it today you would earn a total of  87.00  from holding Gold Road Resources or generate 56.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Gold Road Resources  vs.  Djerriwarrh Investments

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-505101520
JavaScript chart by amCharts 3.21.15GOR DJW
       Timeline  
Gold Road Resources 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gold Road unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.71.81.922.12.22.32.42.5
Djerriwarrh Investments 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Djerriwarrh Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Djerriwarrh Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan3.13.153.23.25

Gold Road and Djerriwarrh Investments Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.86-5.14-3.42-1.690.01.823.675.527.37 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15GOR DJW
       Returns  

Pair Trading with Gold Road and Djerriwarrh Investments

The main advantage of trading using opposite Gold Road and Djerriwarrh Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Djerriwarrh Investments 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 Djerriwarrh Investments will offset losses from the drop in Djerriwarrh Investments' long position.
The idea behind Gold Road Resources and Djerriwarrh Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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