Correlation Between Golden Goliath and Golden Phoenix

Can any of the company-specific risk be diversified away by investing in both Golden Goliath and Golden Phoenix 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 Golden Phoenix 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 Golden Phoenix Minrl, you can compare the effects of market volatilities on Golden Goliath and Golden Phoenix 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 Golden Phoenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Goliath and Golden Phoenix.

Diversification Opportunities for Golden Goliath and Golden Phoenix

0.0

Correlation Coefficient

Golden Goliath  Golden Phoenix

Pay attention - limited upside

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

Pair Corralation between Golden Goliath and Golden Phoenix

If you would invest  4.00  in Golden Goliath Resources on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Golden Goliath Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Golden Goliath Resources  vs.  Golden Phoenix Minrl

Golden Goliath Resources

Risk-Adjusted Performance

4 of 100

Insignificant

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

Golden Phoenix Minrl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Phoenix Minrl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Golden Phoenix 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 Goliath and Golden Phoenix

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

The idea behind Golden Goliath Resources and Golden Phoenix Minrl 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.