Correlation Between Golden Star and Blue Whale

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

By analyzing existing cross correlation between Golden Star Acquisition and Blue Whale Acquisition, you can compare the effects of market volatilities on Golden Star and Blue Whale 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 Blue Whale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Blue Whale.

Diversification Opportunities for Golden Star and Blue Whale

0.42

Correlation Coefficient

Golden Star  Blue Whale

Very weak diversification

The 3 months correlation between Golden and Blue is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale Acquisition 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 Acquisition are associated (or correlated) with Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of Golden Star i.e., Golden Star and Blue Whale go up and down completely randomly.

Pair Corralation between Golden Star and Blue Whale

If you would invest  1,059  in Golden Star Acquisition on September 27, 2024 and sell it today you would earn a total of  90.00  from holding Golden Star Acquisition or generate 8.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.37%
Values	Daily Returns

Golden Star Acquisition  vs.  Blue Whale Acquisition

Golden Star Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Star is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Blue Whale Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Whale Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Blue Whale is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Golden Star and Blue Whale

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

The idea behind Golden Star Acquisition and Blue Whale Acquisition 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.