Correlation Between Max Resource and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Max Resource 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 Max Resource and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Max Resource Corp and GoGold Resources, you can compare the effects of market volatilities on Max Resource 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 Max Resource with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Resource and GoGold Resources.
Diversification Opportunities for Max Resource and GoGold Resources
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Max and GoGold is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Max Resource Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Max Resource 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 Max Resource 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 Max Resource i.e., Max Resource and GoGold Resources go up and down completely randomly.
Pair Corralation between Max Resource and GoGold Resources
Assuming the 90 days horizon Max Resource Corp is expected to generate 2.19 times more return on investment than GoGold Resources. However, Max Resource is 2.19 times more volatile than GoGold Resources. It trades about 0.23 of its potential returns per unit of risk. GoGold Resources is currently generating about 0.38 per unit of risk. If you would invest 3.00 in Max Resource Corp on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Max Resource Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Max Resource Corp vs. GoGold Resources
Performance |
| Timeline |
| Max Resource Corp |
| GoGold Resources |
Max Resource and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Max Resource and GoGold Resources
The main advantage of trading using opposite Max Resource and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Resource 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.| Max Resource vs. American Sierra Gold | Max Resource vs. Gold79 Mines | Max Resource vs. Cartier Iron Corp | Max Resource vs. Alien Metals |
| GoGold Resources vs. Regenx Tech Corp | GoGold Resources vs. P2 Gold | GoGold Resources vs. Max Resource Corp | GoGold Resources vs. Pacific Ridge 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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