Correlation Between Boat Rocker and Goldbank Mining

Can any of the company-specific risk be diversified away by investing in both Boat Rocker and Goldbank Mining 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 Boat Rocker and Goldbank Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boat Rocker Media and Goldbank Mining Corp, you can compare the effects of market volatilities on Boat Rocker and Goldbank Mining 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 Boat Rocker with a short position of Goldbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boat Rocker and Goldbank Mining.

Diversification Opportunities for Boat Rocker and Goldbank Mining

-0.09

Correlation Coefficient

Boat Rocker  Goldbank Mining

Good diversification

The 3 months correlation between Boat and Goldbank is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Boat Rocker Media and Goldbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldbank Mining Corp and Boat Rocker 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 Boat Rocker Media are associated (or correlated) with Goldbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldbank Mining Corp has no effect on the direction of Boat Rocker i.e., Boat Rocker and Goldbank Mining go up and down completely randomly.

Pair Corralation between Boat Rocker and Goldbank Mining

Assuming the 90 days trading horizon Boat Rocker Media is expected to generate 1.01 times more return on investment than Goldbank Mining. However, Boat Rocker is 1.01 times more volatile than Goldbank Mining Corp. It trades about -0.06 of its potential returns per unit of risk. Goldbank Mining Corp is currently generating about -0.22 per unit of risk. If you would invest  65.00  in Boat Rocker Media on September 24, 2024 and sell it today you would lose (5.00) from holding Boat Rocker Media or give up 7.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boat Rocker Media  vs.  Goldbank Mining Corp

Boat Rocker Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boat Rocker Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Goldbank Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldbank Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Goldbank Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boat Rocker and Goldbank Mining

The main advantage of trading using opposite Boat Rocker and Goldbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boat Rocker position performs unexpectedly, Goldbank Mining 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 Goldbank Mining will offset losses from the drop in Goldbank Mining's long position.

The idea behind Boat Rocker Media and Goldbank Mining 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.