Correlation Between Great Atlantic and Gossan Resources
Can any of the company-specific risk be diversified away by investing in both Great Atlantic and Gossan Resources 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 Great Atlantic and Gossan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Atlantic Resources and Gossan Resources, you can compare the effects of market volatilities on Great Atlantic and Gossan Resources 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 Great Atlantic with a short position of Gossan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Atlantic and Gossan Resources.
Diversification Opportunities for Great Atlantic and Gossan Resources
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Gossan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Great Atlantic Resources and Gossan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossan Resources and Great Atlantic 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 Great Atlantic Resources are associated (or correlated) with Gossan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossan Resources has no effect on the direction of Great Atlantic i.e., Great Atlantic and Gossan Resources go up and down completely randomly.
Pair Corralation between Great Atlantic and Gossan Resources
Given the investment horizon of 90 days Great Atlantic Resources is expected to under-perform the Gossan Resources. But the stock apears to be less risky and, when comparing its historical volatility, Great Atlantic Resources is 1.74 times less risky than Gossan Resources. The stock trades about -0.01 of its potential returns per unit of risk. The Gossan Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Gossan Resources on September 25, 2024 and sell it today you would lose (1.00) from holding Gossan Resources or give up 33.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Great Atlantic Resources vs. Gossan Resources
Performance |
Timeline |
Great Atlantic Resources |
Gossan Resources |
Great Atlantic and Gossan Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Great Atlantic and Gossan Resources
The main advantage of trading using opposite Great Atlantic and Gossan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Atlantic position performs unexpectedly, Gossan Resources 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 Gossan Resources will offset losses from the drop in Gossan Resources' long position.Great Atlantic vs. Gossan Resources | Great Atlantic vs. Golden Ridge Resources | Great Atlantic vs. Jaxon Mining | Great Atlantic vs. Highway 50 Gold |
Gossan Resources vs. Highway 50 Gold | Gossan Resources vs. Galore Resources | Gossan Resources vs. Happy Creek Minerals | Gossan Resources vs. Bold Ventures |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |