Correlation Between New Found and Goliath Resources
Can any of the company-specific risk be diversified away by investing in both New Found 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 New Found and Goliath Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Found Gold and Goliath Resources, you can compare the effects of market volatilities on New Found 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 New Found with a short position of Goliath Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Found and Goliath Resources.
Diversification Opportunities for New Found and Goliath Resources
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Goliath is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding New Found Gold and Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and New Found 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 New Found Gold 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 New Found i.e., New Found and Goliath Resources go up and down completely randomly.
Pair Corralation between New Found and Goliath Resources
Assuming the 90 days horizon New Found Gold is expected to under-perform the Goliath Resources. In addition to that, New Found is 1.11 times more volatile than Goliath Resources. It trades about -0.1 of its total potential returns per unit of risk. Goliath Resources is currently generating about 0.05 per unit of volatility. If you would invest 99.00 in Goliath Resources on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Goliath Resources or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Found Gold vs. Goliath Resources
Performance |
| Timeline |
| New Found Gold |
| Goliath Resources |
New Found and Goliath Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Found and Goliath Resources
The main advantage of trading using opposite New Found and Goliath Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Found 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.| New Found vs. Oculus VisionTech | New Found vs. CNJ Capital Investments | New Found vs. Quisitive Technology Solutions | New Found vs. Cogeco Communications |
| Goliath Resources vs. Eskay Mining Corp | Goliath Resources vs. Lion One Metals | Goliath Resources vs. Cassiar Gold Corp | Goliath Resources vs. Blackrock Silver 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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