Correlation Between Treasury Metals and GGX Gold
Can any of the company-specific risk be diversified away by investing in both Treasury Metals and GGX Gold 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 Treasury Metals and GGX Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Metals and GGX Gold Corp, you can compare the effects of market volatilities on Treasury Metals and GGX Gold 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 Treasury Metals with a short position of GGX Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Metals and GGX Gold.
Diversification Opportunities for Treasury Metals and GGX Gold
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Treasury and GGX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Metals and GGX Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGX Gold Corp and Treasury 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 Treasury Metals are associated (or correlated) with GGX Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGX Gold Corp has no effect on the direction of Treasury Metals i.e., Treasury Metals and GGX Gold go up and down completely randomly.
Pair Corralation between Treasury Metals and GGX Gold
Assuming the 90 days horizon Treasury Metals is expected to generate 3.54 times less return on investment than GGX Gold. But when comparing it to its historical volatility, Treasury Metals is 3.13 times less risky than GGX Gold. It trades about 0.06 of its potential returns per unit of risk. GGX Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.32 in GGX Gold Corp on August 25, 2024 and sell it today you would earn a total of 0.50 from holding GGX Gold Corp or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.21% |
| Values | Daily Returns |
Treasury Metals vs. GGX Gold Corp
Performance |
| Timeline |
| Treasury Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| GGX Gold Corp |
Treasury Metals and GGX Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Metals and GGX Gold
The main advantage of trading using opposite Treasury Metals and GGX Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Metals position performs unexpectedly, GGX Gold 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 GGX Gold will offset losses from the drop in GGX Gold's long position.| Treasury Metals vs. Nulegacy Gold | Treasury Metals vs. Labrador Gold Corp | Treasury Metals vs. Phenom Resources Corp | Treasury Metals vs. Rover Metals Corp |
| GGX Gold vs. Aurion Resources | GGX Gold vs. Liberty Gold Corp | GGX Gold vs. Rio2 Limited | GGX Gold vs. Orezone Gold 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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