Correlation Between Allkem and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both Allkem 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 Allkem and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allkem and Golden Goliath Resources, you can compare the effects of market volatilities on Allkem 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 Allkem with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allkem and Golden Goliath.
Diversification Opportunities for Allkem and Golden Goliath
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allkem and Golden is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Allkem 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 Allkem 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 Allkem 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 Allkem i.e., Allkem and Golden Goliath go up and down completely randomly.
Pair Corralation between Allkem and Golden Goliath
If you would invest 3.00 in Golden Goliath Resources on September 13, 2024 and sell it today you would lose (1.25) from holding Golden Goliath Resources or give up 41.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Allkem vs. Golden Goliath Resources
Performance |
| Timeline |
| Allkem |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Golden Goliath Resources |
Allkem and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allkem and Golden Goliath
The main advantage of trading using opposite Allkem and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allkem 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.The idea behind Allkem and Golden Goliath Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Golden Goliath vs. Qubec Nickel Corp | Golden Goliath vs. IGO Limited | Golden Goliath vs. Focus Graphite | Golden Goliath vs. Mineral Res |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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