Correlation Between Gold Reserve and Sixty North

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

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

Diversification Opportunities for Gold Reserve and Sixty North

0.28

Correlation Coefficient

Gold Reserve  Sixty North

Modest diversification

The 3 months correlation between Gold and Sixty is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gold Reserve and Sixty North Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixty North Gold and Gold Reserve 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 Gold Reserve are associated (or correlated) with Sixty North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixty North Gold has no effect on the direction of Gold Reserve i.e., Gold Reserve and Sixty North go up and down completely randomly.

Pair Corralation between Gold Reserve and Sixty North

Assuming the 90 days horizon Gold Reserve is expected to generate 39.34 times less return on investment than Sixty North. But when comparing it to its historical volatility, Gold Reserve is 4.22 times less risky than Sixty North. It trades about 0.01 of its potential returns per unit of risk. Sixty North Gold is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Sixty North Gold on September 27, 2024 and sell it today you would lose (5.50) from holding Sixty North Gold or give up 45.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Gold Reserve  vs.  Sixty North Gold

Gold Reserve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Reserve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gold Reserve is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sixty North Gold

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sixty North Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sixty North reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gold Reserve and Sixty North

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

The idea behind Gold Reserve and Sixty North Gold 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.