Correlation Between Strikepoint Gold and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Strikepoint Gold 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 Strikepoint Gold and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strikepoint Gold and GoGold Resources, you can compare the effects of market volatilities on Strikepoint Gold 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 Strikepoint Gold with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strikepoint Gold and GoGold Resources.
Diversification Opportunities for Strikepoint Gold and GoGold Resources
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strikepoint and GoGold is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Strikepoint Gold and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Strikepoint Gold 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 Strikepoint Gold 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 Strikepoint Gold i.e., Strikepoint Gold and GoGold Resources go up and down completely randomly.
Pair Corralation between Strikepoint Gold and GoGold Resources
Assuming the 90 days horizon Strikepoint Gold is expected to under-perform the GoGold Resources. In addition to that, Strikepoint Gold is 3.37 times more volatile than GoGold Resources. It trades about -0.22 of its total potential returns per unit of risk. GoGold Resources is currently generating about -0.2 per unit of volatility. If you would invest 128.00 in GoGold Resources on September 19, 2024 and sell it today you would lose (14.00) from holding GoGold Resources or give up 10.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strikepoint Gold vs. GoGold Resources
Performance |
| Timeline |
| Strikepoint Gold |
| GoGold Resources |
Strikepoint Gold and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strikepoint Gold and GoGold Resources
The main advantage of trading using opposite Strikepoint Gold and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strikepoint Gold 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.| Strikepoint Gold vs. Foraco International SA | Strikepoint Gold vs. Geodrill Limited | Strikepoint Gold vs. Major Drilling Group | Strikepoint Gold vs. Bri Chem Corp |
| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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