Correlation Between NYSE Composite and GGX Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and GGX Gold 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 NYSE Composite and GGX Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and GGX Gold Corp, you can compare the effects of market volatilities on NYSE Composite and GGX Gold 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 NYSE Composite with a short position of GGX Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and GGX Gold.
Diversification Opportunities for NYSE Composite and GGX Gold
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and GGX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and GGX Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGX Gold Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with GGX Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGX Gold Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and GGX Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and GGX Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.92 times less return on investment than GGX Gold. But when comparing it to its historical volatility, NYSE Composite is 20.21 times less risky than GGX Gold. It trades about 0.19 of its potential returns per unit of risk. GGX Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.85 in GGX Gold Corp on August 25, 2024 and sell it today you would lose (0.03) from holding GGX Gold Corp or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. GGX Gold Corp
Performance |
| Timeline |
NYSE Composite and GGX Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
GGX Gold Corp
Pair trading matchups for GGX Gold
Pair Trading with NYSE Composite and GGX Gold
The main advantage of trading using opposite NYSE Composite and GGX Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, GGX Gold 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 GGX Gold will offset losses from the drop in GGX Gold's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| GGX Gold vs. Aurion Resources | GGX Gold vs. Liberty Gold Corp | GGX Gold vs. Rio2 Limited | GGX Gold vs. Orezone Gold 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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