Correlation Between CANEX Metals and Goldcliff Resource

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

By analyzing existing cross correlation between CANEX Metals and Goldcliff Resource Corp, you can compare the effects of market volatilities on CANEX Metals and Goldcliff Resource 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 CANEX Metals with a short position of Goldcliff Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANEX Metals and Goldcliff Resource.

Diversification Opportunities for CANEX Metals and Goldcliff Resource

-0.05

Correlation Coefficient

CANEX Metals  Goldcliff Resource

Good diversification

The 3 months correlation between CANEX and Goldcliff is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CANEX Metals and Goldcliff Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldcliff Resource Corp and CANEX 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 CANEX Metals are associated (or correlated) with Goldcliff Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldcliff Resource Corp has no effect on the direction of CANEX Metals i.e., CANEX Metals and Goldcliff Resource go up and down completely randomly.

Pair Corralation between CANEX Metals and Goldcliff Resource

Assuming the 90 days trading horizon CANEX Metals is expected to under-perform the Goldcliff Resource. But the stock apears to be less risky and, when comparing its historical volatility, CANEX Metals is 1.89 times less risky than Goldcliff Resource. The stock trades about -0.29 of its potential returns per unit of risk. The Goldcliff Resource Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Goldcliff Resource Corp on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Goldcliff Resource Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

CANEX Metals  vs.  Goldcliff Resource Corp

CANEX Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CANEX Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CANEX Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Goldcliff Resource Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldcliff Resource Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Goldcliff Resource showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CANEX Metals and Goldcliff Resource

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

The idea behind CANEX Metals and Goldcliff Resource 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.