Correlation Between CP ALL and Golden Star

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

By analyzing existing cross correlation between CP ALL Public and Golden Star Resource, you can compare the effects of market volatilities on CP ALL and Golden Star 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 CP ALL with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Golden Star.

Diversification Opportunities for CP ALL and Golden Star

-0.07

Correlation Coefficient

CP ALL  Golden Star

Good diversification

The 3 months correlation between CVPBF and Golden is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Golden Star Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Resource and CP ALL 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 CP ALL Public are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Resource has no effect on the direction of CP ALL i.e., CP ALL and Golden Star go up and down completely randomly.

Pair Corralation between CP ALL and Golden Star

Assuming the 90 days horizon CP ALL Public is expected to under-perform the Golden Star. But the pink sheet apears to be less risky and, when comparing its historical volatility, CP ALL Public is 1.39 times less risky than Golden Star. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Golden Star Resource is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Golden Star Resource on September 16, 2024 and sell it today you would earn a total of  15.00  from holding Golden Star Resource or generate 15.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

CP ALL Public  vs.  Golden Star Resource

CP ALL Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Golden Star Resource

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Resource are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Golden Star unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CP ALL and Golden Star

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

The idea behind CP ALL Public and Golden Star Resource 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.