Correlation Between Goldbank Mining and Stakeholder Gold

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

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

Diversification Opportunities for Goldbank Mining and Stakeholder Gold

0.21

Correlation Coefficient

Goldbank Mining  Stakeholder Gold

Modest diversification

The 3 months correlation between Goldbank and Stakeholder is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Goldbank Mining Corp and Stakeholder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stakeholder Gold Corp and Goldbank Mining 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 Goldbank Mining Corp are associated (or correlated) with Stakeholder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stakeholder Gold Corp has no effect on the direction of Goldbank Mining i.e., Goldbank Mining and Stakeholder Gold go up and down completely randomly.

Pair Corralation between Goldbank Mining and Stakeholder Gold

Assuming the 90 days horizon Goldbank Mining Corp is expected to generate 0.9 times more return on investment than Stakeholder Gold. However, Goldbank Mining Corp is 1.11 times less risky than Stakeholder Gold. It trades about 0.06 of its potential returns per unit of risk. Stakeholder Gold Corp is currently generating about 0.05 per unit of risk. If you would invest  7.00  in Goldbank Mining Corp on September 29, 2024 and sell it today you would earn a total of  11.00  from holding Goldbank Mining Corp or generate 157.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Goldbank Mining Corp  vs.  Stakeholder Gold Corp

Goldbank Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldbank Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Goldbank Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Stakeholder Gold Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stakeholder Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Stakeholder Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Goldbank Mining and Stakeholder Gold

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

The idea behind Goldbank Mining Corp and Stakeholder 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 Transaction History module to view history of all your transactions and understand their impact on performance.