Correlation Between Pacific Ridge and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Pacific Ridge 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 Pacific Ridge and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Ridge Exploration and GoGold Resources, you can compare the effects of market volatilities on Pacific Ridge 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 Pacific Ridge with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Ridge and GoGold Resources.
Diversification Opportunities for Pacific Ridge and GoGold Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and GoGold is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Ridge Exploration and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Pacific Ridge 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 Pacific Ridge Exploration 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 Pacific Ridge i.e., Pacific Ridge and GoGold Resources go up and down completely randomly.
Pair Corralation between Pacific Ridge and GoGold Resources
Assuming the 90 days horizon Pacific Ridge Exploration is expected to generate 3.3 times more return on investment than GoGold Resources. However, Pacific Ridge is 3.3 times more volatile than GoGold Resources. It trades about 0.01 of its potential returns per unit of risk. GoGold Resources is currently generating about -0.01 per unit of risk. If you would invest 18.00 in Pacific Ridge Exploration on August 30, 2024 and sell it today you would lose (16.00) from holding Pacific Ridge Exploration or give up 88.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Ridge Exploration vs. GoGold Resources
Performance |
| Timeline |
| Pacific Ridge Exploration |
| GoGold Resources |
Pacific Ridge and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Ridge and GoGold Resources
The main advantage of trading using opposite Pacific Ridge and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Ridge 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.| Pacific Ridge vs. Alien Metals | Pacific Ridge vs. Cartier Iron Corp | Pacific Ridge vs. Arctic Star Exploration | Pacific Ridge vs. Denarius Silver Corp |
| GoGold Resources vs. Silver Hammer Mining | GoGold Resources vs. Reyna Silver Corp | GoGold Resources vs. Guanajuato Silver | GoGold Resources vs. Silver One Resources |
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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