Correlation Between Liberty Gold and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and GoGold 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 Liberty Gold and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Gold Corp and GoGold Resources, you can compare the effects of market volatilities on Liberty Gold and GoGold 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 Liberty Gold with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and GoGold Resources.
Diversification Opportunities for Liberty Gold and GoGold Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liberty and GoGold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Liberty Gold 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 Liberty Gold Corp are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Liberty Gold i.e., Liberty Gold and GoGold Resources go up and down completely randomly.
Pair Corralation between Liberty Gold and GoGold Resources
Assuming the 90 days trading horizon Liberty Gold Corp is expected to generate 1.72 times more return on investment than GoGold Resources. However, Liberty Gold is 1.72 times more volatile than GoGold Resources. It trades about -0.12 of its potential returns per unit of risk. GoGold Resources is currently generating about -0.33 per unit of risk. If you would invest 36.00 in Liberty Gold Corp on August 29, 2024 and sell it today you would lose (6.00) from holding Liberty Gold Corp or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. GoGold Resources
Performance |
| Timeline |
| Liberty Gold Corp |
| GoGold Resources |
Liberty Gold and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and GoGold Resources
The main advantage of trading using opposite Liberty Gold and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, GoGold 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| Liberty Gold vs. First Majestic Silver | Liberty Gold vs. Ivanhoe Energy | Liberty Gold vs. Orezone Gold Corp | Liberty Gold vs. Faraday Copper Corp |
| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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