Correlation Between Red Moon and Garibaldi Resources

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Can any of the company-specific risk be diversified away by investing in both Red Moon and Garibaldi 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 Red Moon and Garibaldi Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Moon Resources and Garibaldi Resources Corp, you can compare the effects of market volatilities on Red Moon and Garibaldi 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 Red Moon with a short position of Garibaldi Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Moon and Garibaldi Resources.

Diversification Opportunities for Red Moon and Garibaldi Resources

RedGaribaldiDiversified AwayRedGaribaldiDiversified Away100%
-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Red and Garibaldi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Red Moon Resources and Garibaldi Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garibaldi Resources Corp and Red Moon 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 Red Moon Resources are associated (or correlated) with Garibaldi Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garibaldi Resources Corp has no effect on the direction of Red Moon i.e., Red Moon and Garibaldi Resources go up and down completely randomly.

Pair Corralation between Red Moon and Garibaldi Resources

Assuming the 90 days horizon Red Moon is expected to generate 39.64 times less return on investment than Garibaldi Resources. But when comparing it to its historical volatility, Red Moon Resources is 7.19 times less risky than Garibaldi Resources. It trades about 0.02 of its potential returns per unit of risk. Garibaldi Resources Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Garibaldi Resources Corp on November 26, 2024 and sell it today you would lose (2.00) from holding Garibaldi Resources Corp or give up 28.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.63%
ValuesDaily Returns

Red Moon Resources  vs.  Garibaldi Resources Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-20020406080100
JavaScript chart by amCharts 3.21.15REMRF GGIFF
       Timeline  
Red Moon Resources 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Red Moon Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Red Moon may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.40.420.440.460.480.50.52
Garibaldi Resources Corp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Garibaldi Resources Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Garibaldi Resources reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.030.040.050.060.070.08

Red Moon and Garibaldi Resources Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.01-7.5-4.99-2.470.02.464.967.5110.0612.6 0.010.020.030.04
JavaScript chart by amCharts 3.21.15REMRF GGIFF
       Returns  

Pair Trading with Red Moon and Garibaldi Resources

The main advantage of trading using opposite Red Moon and Garibaldi Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Moon position performs unexpectedly, Garibaldi 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 Garibaldi Resources will offset losses from the drop in Garibaldi Resources' long position.
The idea behind Red Moon Resources and Garibaldi Resources Corp 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.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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