Correlation Between IGO and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both IGO and Golden Goliath 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 IGO and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Golden Goliath Resources, you can compare the effects of market volatilities on IGO and Golden Goliath 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 IGO with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Golden Goliath.
Diversification Opportunities for IGO and Golden Goliath
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IGO and Golden is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Golden Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Goliath Resources and IGO 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 IGO Limited are associated (or correlated) with Golden Goliath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Goliath Resources has no effect on the direction of IGO i.e., IGO and Golden Goliath go up and down completely randomly.
Pair Corralation between IGO and Golden Goliath
Assuming the 90 days horizon IGO Limited is expected to under-perform the Golden Goliath. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 25.83 times less risky than Golden Goliath. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Golden Goliath Resources is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 6.70 in Golden Goliath Resources on September 14, 2024 and sell it today you would lose (4.69) from holding Golden Goliath Resources or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.37% |
| Values | Daily Returns |
IGO Limited vs. Golden Goliath Resources
Performance |
| Timeline |
| IGO Limited |
| Golden Goliath Resources |
IGO and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Golden Goliath
The main advantage of trading using opposite IGO and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Golden Goliath 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 Golden Goliath will offset losses from the drop in Golden Goliath's long position.The idea behind IGO Limited and Golden Goliath 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.| Golden Goliath vs. Qubec Nickel Corp | Golden Goliath vs. IGO Limited | Golden Goliath vs. Focus Graphite | Golden Goliath vs. Mineral Res |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |