Correlation Between Goldcliff Resource and TNR Gold

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

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

Diversification Opportunities for Goldcliff Resource and TNR Gold

-0.13

Correlation Coefficient

Goldcliff Resource  TNR Gold

Good diversification

The 3 months correlation between Goldcliff and TNR is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Goldcliff Resource Corp and TNR Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TNR Gold Corp and Goldcliff Resource 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 Goldcliff Resource Corp are associated (or correlated) with TNR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TNR Gold Corp has no effect on the direction of Goldcliff Resource i.e., Goldcliff Resource and TNR Gold go up and down completely randomly.

Pair Corralation between Goldcliff Resource and TNR Gold

Assuming the 90 days horizon Goldcliff Resource Corp is expected to generate 2.26 times more return on investment than TNR Gold. However, Goldcliff Resource is 2.26 times more volatile than TNR Gold Corp. It trades about 0.05 of its potential returns per unit of risk. TNR Gold Corp is currently generating about 0.03 per unit of risk. If you would invest  3.00  in Goldcliff Resource Corp on September 19, 2024 and sell it today you would lose (0.50) from holding Goldcliff Resource Corp or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Goldcliff Resource Corp  vs.  TNR Gold Corp

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.

TNR Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TNR Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, TNR Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Goldcliff Resource and TNR Gold

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

The idea behind Goldcliff Resource Corp and TNR Gold 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.