Correlation Between Lake Resources and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both Lake Resources 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 Lake Resources and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lake Resources NL and Golden Goliath Resources, you can compare the effects of market volatilities on Lake Resources 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 Lake Resources with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Golden Goliath.
Diversification Opportunities for Lake Resources and Golden Goliath
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lake and Golden is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL 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 Lake 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 Lake Resources NL 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 Lake Resources i.e., Lake Resources and Golden Goliath go up and down completely randomly.
Pair Corralation between Lake Resources and Golden Goliath
Assuming the 90 days horizon Lake Resources NL is expected to under-perform the Golden Goliath. But the otc stock apears to be less risky and, when comparing its historical volatility, Lake Resources NL is 11.75 times less risky than Golden Goliath. The otc stock trades about -0.04 of its potential returns per unit of risk. The Golden Goliath Resources is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Golden Goliath Resources on August 31, 2024 and sell it today you would lose (4.10) from holding Golden Goliath Resources or give up 31.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.57% |
| Values | Daily Returns |
Lake Resources NL vs. Golden Goliath Resources
Performance |
| Timeline |
| Lake Resources NL |
| Golden Goliath Resources |
Lake Resources and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Resources and Golden Goliath
The main advantage of trading using opposite Lake Resources and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources 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.| Lake Resources vs. Liontown Resources Limited | Lake Resources vs. ATT Inc | Lake Resources vs. Merck Company | Lake Resources vs. Walt Disney |
| Golden Goliath vs. Silver Spruce Resources | Golden Goliath vs. Portofino Resources | Golden Goliath vs. Freegold Ventures Limited | Golden Goliath vs. Bravada 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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