Correlation Between GoGold Resources and Goff Corp

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Can any of the company-specific risk be diversified away by investing in both GoGold Resources and Goff Corp 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 GoGold Resources and Goff Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and Goff Corp, you can compare the effects of market volatilities on GoGold Resources and Goff Corp 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 GoGold Resources with a short position of Goff Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and Goff Corp.

Diversification Opportunities for GoGold Resources and Goff Corp

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between GoGold and Goff is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Goff Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goff Corp and GoGold Resources 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 GoGold Resources are associated (or correlated) with Goff Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goff Corp has no effect on the direction of GoGold Resources i.e., GoGold Resources and Goff Corp go up and down completely randomly.

Pair Corralation between GoGold Resources and Goff Corp

Assuming the 90 days horizon GoGold Resources is expected to generate 0.31 times more return on investment than Goff Corp. However, GoGold Resources is 3.19 times less risky than Goff Corp. It trades about 0.07 of its potential returns per unit of risk. Goff Corp is currently generating about 0.01 per unit of risk. If you would invest  80.00  in GoGold Resources on September 6, 2024 and sell it today you would earn a total of  12.00  from holding GoGold Resources or generate 15.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GoGold Resources  vs.  Goff Corp

 Performance 
       Timeline  
GoGold Resources 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in GoGold Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, GoGold Resources reported solid returns over the last few months and may actually be approaching a breakup point.
Goff Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Goff Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile technical and fundamental indicators, Goff Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GoGold Resources and Goff Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GoGold Resources and Goff Corp

The main advantage of trading using opposite GoGold Resources and Goff Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources position performs unexpectedly, Goff Corp 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 Goff Corp will offset losses from the drop in Goff Corp's long position.
The idea behind GoGold Resources and Goff 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.
Check out your portfolio center.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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