Correlation Between Golden Tag and Stelmine Canada

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

By analyzing existing cross correlation between Golden Tag Resources and Stelmine Canada, you can compare the effects of market volatilities on Golden Tag and Stelmine Canada 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 Tag with a short position of Stelmine Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Tag and Stelmine Canada.

Diversification Opportunities for Golden Tag and Stelmine Canada

0.08

Correlation Coefficient

Golden Tag  Stelmine Canada

Significant diversification

The 3 months correlation between Golden and Stelmine is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Golden Tag Resources and Stelmine Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelmine Canada and Golden Tag 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 Tag Resources are associated (or correlated) with Stelmine Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelmine Canada has no effect on the direction of Golden Tag i.e., Golden Tag and Stelmine Canada go up and down completely randomly.

Pair Corralation between Golden Tag and Stelmine Canada

If you would invest  9.00  in Golden Tag Resources on September 11, 2024 and sell it today you would earn a total of  0.00  from holding Golden Tag Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Golden Tag Resources  vs.  Stelmine Canada

Golden Tag Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Tag Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Golden Tag is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Stelmine Canada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stelmine Canada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Golden Tag and Stelmine Canada

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

The idea behind Golden Tag Resources and Stelmine Canada 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.