Correlation Between Strategic Metals and Golden Goliath
Can any of the company-specific risk be diversified away by investing in both Strategic Metals 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 Strategic Metals and Golden Goliath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Metals and Golden Goliath Resources, you can compare the effects of market volatilities on Strategic Metals 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 Strategic Metals with a short position of Golden Goliath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Metals and Golden Goliath.
Diversification Opportunities for Strategic Metals and Golden Goliath
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and Golden is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Metals 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 Strategic Metals 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 Strategic Metals 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 Strategic Metals i.e., Strategic Metals and Golden Goliath go up and down completely randomly.
Pair Corralation between Strategic Metals and Golden Goliath
Assuming the 90 days horizon Strategic Metals is expected to generate 39.34 times less return on investment than Golden Goliath. But when comparing it to its historical volatility, Strategic Metals is 13.69 times less risky than Golden Goliath. It trades about 0.07 of its potential returns per unit of risk. Golden Goliath Resources is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Golden Goliath Resources on August 29, 2024 and sell it today you would lose (6.00) from holding Golden Goliath Resources or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Strategic Metals vs. Golden Goliath Resources
Performance |
| Timeline |
| Strategic Metals |
| Golden Goliath Resources |
Strategic Metals and Golden Goliath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Metals and Golden Goliath
The main advantage of trading using opposite Strategic Metals and Golden Goliath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Metals 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.| Strategic Metals vs. Silver Hammer Mining | Strategic Metals vs. Reyna Silver Corp | Strategic Metals vs. Guanajuato Silver | Strategic Metals vs. Silver One Resources |
| Golden Goliath vs. Rockridge Resources | Golden Goliath vs. Ameriwest Lithium | Golden Goliath vs. Osisko Metals Incorporated | Golden Goliath vs. Volt Lithium 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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