Correlation Between Golden Star and Focus Impact

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

Diversification Opportunities for Golden Star and Focus Impact

-0.18

Correlation Coefficient

Golden Star  Focus Impact

Good diversification

The 3 months correlation between Golden and Focus is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and Focus Impact Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Impact 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 Focus Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Impact Acquisition has no effect on the direction of Golden Star i.e., Golden Star and Focus Impact go up and down completely randomly.

Pair Corralation between Golden Star and Focus Impact

Assuming the 90 days horizon Golden Star Acquisition is expected to generate 0.1 times more return on investment than Focus Impact. However, Golden Star Acquisition is 10.36 times less risky than Focus Impact. It trades about 0.03 of its potential returns per unit of risk. Focus Impact Acquisition is currently generating about -0.05 per unit of risk. If you would invest  1,123  in Golden Star Acquisition on September 5, 2024 and sell it today you would earn a total of  26.00  from holding Golden Star Acquisition or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.6%
Values	Daily Returns

Golden Star Acquisition  vs.  Focus Impact Acquisition

Golden Star Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 2 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Focus Impact Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Focus Impact Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Golden Star and Focus Impact

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

The idea behind Golden Star Acquisition and Focus Impact 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.