Correlation Between Golden Tag and Zacapa Resources
Can any of the company-specific risk be diversified away by investing in both Golden Tag and Zacapa Resources 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 Tag and Zacapa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Tag Resources and Zacapa Resources, you can compare the effects of market volatilities on Golden Tag and Zacapa Resources 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 Tag with a short position of Zacapa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Tag and Zacapa Resources.
Diversification Opportunities for Golden Tag and Zacapa Resources
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Zacapa is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Golden Tag Resources and Zacapa Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zacapa Resources and Golden Tag 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 Tag Resources are associated (or correlated) with Zacapa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zacapa Resources has no effect on the direction of Golden Tag i.e., Golden Tag and Zacapa Resources go up and down completely randomly.
Pair Corralation between Golden Tag and Zacapa Resources
Assuming the 90 days horizon Golden Tag is expected to generate 1.16 times less return on investment than Zacapa Resources. In addition to that, Golden Tag is 3.55 times more volatile than Zacapa Resources. It trades about 0.05 of its total potential returns per unit of risk. Zacapa Resources is currently generating about 0.22 per unit of volatility. If you would invest 2.89 in Zacapa Resources on October 24, 2024 and sell it today you would earn a total of 0.34 from holding Zacapa Resources or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Golden Tag Resources vs. Zacapa Resources
Performance |
| Timeline |
| Golden Tag Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zacapa Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Golden Tag and Zacapa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Tag and Zacapa Resources
The main advantage of trading using opposite Golden Tag and Zacapa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Tag position performs unexpectedly, Zacapa Resources 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 Zacapa Resources will offset losses from the drop in Zacapa Resources' long position.| Golden Tag vs. NorthIsle Copper and | Golden Tag vs. Lucky Minerals | Golden Tag vs. Niobay Metals | Golden Tag vs. Kraken Energy Corp |
| Zacapa Resources vs. Pampa Metals | Zacapa Resources vs. Progressive Planet Solutions | Zacapa Resources vs. Searchlight Resources | Zacapa Resources vs. Durango 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |