Correlation Between Goliath Resources and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both Goliath Resources and Labrador Gold 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 Goliath Resources and Labrador Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goliath Resources and Labrador Gold Corp, you can compare the effects of market volatilities on Goliath Resources and Labrador Gold 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 Goliath Resources with a short position of Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goliath Resources and Labrador Gold.
Diversification Opportunities for Goliath Resources and Labrador Gold
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goliath and Labrador is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Goliath Resources and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold Corp and Goliath Resources 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 Goliath Resources are associated (or correlated) with Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of Goliath Resources i.e., Goliath Resources and Labrador Gold go up and down completely randomly.
Pair Corralation between Goliath Resources and Labrador Gold
Assuming the 90 days horizon Goliath Resources is expected to generate 0.54 times more return on investment than Labrador Gold. However, Goliath Resources is 1.84 times less risky than Labrador Gold. It trades about -0.04 of its potential returns per unit of risk. Labrador Gold Corp is currently generating about -0.08 per unit of risk. If you would invest 118.00 in Goliath Resources on September 1, 2024 and sell it today you would lose (4.00) from holding Goliath Resources or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goliath Resources vs. Labrador Gold Corp
Performance |
| Timeline |
| Goliath Resources |
| Labrador Gold Corp |
Goliath Resources and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goliath Resources and Labrador Gold
The main advantage of trading using opposite Goliath Resources and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goliath Resources position performs unexpectedly, Labrador Gold 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 Labrador Gold will offset losses from the drop in Labrador Gold's long position.| Goliath Resources vs. Eskay Mining Corp | Goliath Resources vs. Lion One Metals | Goliath Resources vs. Cassiar Gold Corp | Goliath Resources vs. Blackrock Silver Corp |
| Labrador Gold vs. First Majestic Silver | Labrador Gold vs. Ivanhoe Energy | Labrador Gold vs. Orezone Gold Corp | Labrador Gold vs. Faraday Copper Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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