Correlation Between North Peak and GoldMoney

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

By analyzing existing cross correlation between North Peak Resources and GoldMoney, you can compare the effects of market volatilities on North Peak and GoldMoney 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 North Peak with a short position of GoldMoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Peak and GoldMoney.

Diversification Opportunities for North Peak and GoldMoney

0.24

Correlation Coefficient

North Peak  GoldMoney

Modest diversification

The 3 months correlation between North and GoldMoney is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding North Peak Resources and GoldMoney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMoney and North Peak 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 North Peak Resources are associated (or correlated) with GoldMoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMoney has no effect on the direction of North Peak i.e., North Peak and GoldMoney go up and down completely randomly.

Pair Corralation between North Peak and GoldMoney

Assuming the 90 days horizon North Peak Resources is expected to under-perform the GoldMoney. In addition to that, North Peak is 3.76 times more volatile than GoldMoney. It trades about -0.09 of its total potential returns per unit of risk. GoldMoney is currently generating about -0.07 per unit of volatility. If you would invest  917.00  in GoldMoney on September 4, 2024 and sell it today you would lose (79.00) from holding GoldMoney or give up 8.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

North Peak Resources  vs.  GoldMoney

North Peak Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North Peak Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GoldMoney

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMoney has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with North Peak and GoldMoney

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

The idea behind North Peak Resources and GoldMoney 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..