Correlation Between Golden Star and American International

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

By analyzing existing cross correlation between Golden Star Resource and American International Ventures, you can compare the effects of market volatilities on Golden Star and American International 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 Star with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and American International.

Diversification Opportunities for Golden Star and American International

0.0

Correlation Coefficient

Golden Star  American International

Pay attention - limited upside

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

Pair Corralation between Golden Star and American International

If you would invest  100.00  in Golden Star Resource on September 16, 2024 and sell it today you would earn a total of  15.00  from holding Golden Star Resource or generate 15.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Golden Star Resource  vs.  American International Venture

Golden Star Resource

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Resource are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Golden Star unveiled solid returns over the last few months and may actually be approaching a breakup point.

American International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American International Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, American International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Golden Star and American International

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

The idea behind Golden Star Resource and American International Ventures 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.