Correlation Between Lemonade and Goliath Resources
Can any of the company-specific risk be diversified away by investing in both Lemonade and Goliath 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 Lemonade and Goliath Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lemonade and Goliath Resources Limited, you can compare the effects of market volatilities on Lemonade and Goliath 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 Lemonade with a short position of Goliath Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemonade and Goliath Resources.
Diversification Opportunities for Lemonade and Goliath Resources
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lemonade and Goliath is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lemonade and Goliath Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and Lemonade 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 Lemonade are associated (or correlated) with Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Lemonade i.e., Lemonade and Goliath Resources go up and down completely randomly.
Pair Corralation between Lemonade and Goliath Resources
Given the investment horizon of 90 days Lemonade is expected to generate 3.26 times more return on investment than Goliath Resources. However, Lemonade is 3.26 times more volatile than Goliath Resources Limited. It trades about 0.53 of its potential returns per unit of risk. Goliath Resources Limited is currently generating about -0.14 per unit of risk. If you would invest 1,875 in Lemonade on August 31, 2024 and sell it today you would earn a total of 3,041 from holding Lemonade or generate 162.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemonade vs. Goliath Resources Limited
Performance |
| Timeline |
| Lemonade |
| Goliath Resources |
Lemonade and Goliath Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemonade and Goliath Resources
The main advantage of trading using opposite Lemonade and Goliath Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemonade position performs unexpectedly, Goliath 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 Goliath Resources will offset losses from the drop in Goliath Resources' long position.| Lemonade vs. Fiverr International | Lemonade vs. Pinterest | Lemonade vs. Upstart Holdings | Lemonade vs. Fastly Inc |
| Goliath Resources vs. Gold79 Mines | Goliath Resources vs. Cartier Iron Corp | Goliath Resources vs. Arctic Star Exploration | Goliath Resources vs. Arras Minerals Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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