Correlation Between SPACE and Goldshore Resources
Can any of the company-specific risk be diversified away by investing in both SPACE and Goldshore 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 SPACE and Goldshore Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPACE and Goldshore Resources, you can compare the effects of market volatilities on SPACE and Goldshore 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 SPACE with a short position of Goldshore Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Goldshore Resources.
Diversification Opportunities for SPACE and Goldshore Resources
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPACE and Goldshore is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Goldshore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldshore Resources and SPACE 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 SPACE are associated (or correlated) with Goldshore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldshore Resources has no effect on the direction of SPACE i.e., SPACE and Goldshore Resources go up and down completely randomly.
Pair Corralation between SPACE and Goldshore Resources
Assuming the 90 days horizon SPACE is expected to generate 0.83 times more return on investment than Goldshore Resources. However, SPACE is 1.2 times less risky than Goldshore Resources. It trades about 0.51 of its potential returns per unit of risk. Goldshore Resources is currently generating about -0.21 per unit of risk. If you would invest 36.00 in SPACE on September 4, 2024 and sell it today you would earn a total of 23.00 from holding SPACE or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPACE vs. Goldshore Resources
Performance |
| Timeline |
| SPACE |
| Goldshore Resources |
SPACE and Goldshore Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPACE and Goldshore Resources
The main advantage of trading using opposite SPACE and Goldshore Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPACE position performs unexpectedly, Goldshore 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 Goldshore Resources will offset losses from the drop in Goldshore Resources' long position.The idea behind SPACE and Goldshore Resources 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.| Goldshore Resources vs. Red Pine Exploration | Goldshore Resources vs. Grande Portage Resources | Goldshore Resources vs. Tectonic Metals | Goldshore Resources vs. Puma Exploration |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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