Correlation Between Golden Goliath and Horizonte Minerals

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

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

Diversification Opportunities for Golden Goliath and Horizonte Minerals

0.0

Correlation Coefficient

Golden Goliath  Horizonte Minerals

Pay attention - limited upside

The 3 months correlation between Golden and Horizonte is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Golden Goliath Resources and Horizonte Minerals Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizonte Minerals Plc and Golden Goliath 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 Golden Goliath Resources are associated (or correlated) with Horizonte Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizonte Minerals Plc has no effect on the direction of Golden Goliath i.e., Golden Goliath and Horizonte Minerals go up and down completely randomly.

Pair Corralation between Golden Goliath and Horizonte Minerals

If you would invest  9.00  in Golden Goliath Resources on September 3, 2024 and sell it today you would lose (2.90) from holding Golden Goliath Resources or give up 32.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	76.92%
Values	Daily Returns

Golden Goliath Resources  vs.  Horizonte Minerals Plc

Golden Goliath Resources

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Goliath Resources are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Golden Goliath reported solid returns over the last few months and may actually be approaching a breakup point.

Horizonte Minerals Plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Golden Goliath and Horizonte Minerals

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

The idea behind Golden Goliath Resources and Horizonte Minerals Plc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.