Correlation Between Hummingbird Resources and GGX Gold

Can any of the company-specific risk be diversified away by investing in both Hummingbird Resources and GGX Gold 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 Hummingbird Resources and GGX Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hummingbird Resources PLC and GGX Gold Corp, you can compare the effects of market volatilities on Hummingbird Resources and GGX Gold 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 Hummingbird Resources with a short position of GGX Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hummingbird Resources and GGX Gold.

Diversification Opportunities for Hummingbird Resources and GGX Gold

0.52

Correlation Coefficient

Hummingbird Resources  GGX Gold

Very weak diversification

The 3 months correlation between Hummingbird and GGX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hummingbird Resources PLC and GGX Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGX Gold Corp and Hummingbird Resources 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 Hummingbird Resources PLC are associated (or correlated) with GGX Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGX Gold Corp has no effect on the direction of Hummingbird Resources i.e., Hummingbird Resources and GGX Gold go up and down completely randomly.

Pair Corralation between Hummingbird Resources and GGX Gold

Assuming the 90 days horizon Hummingbird Resources PLC is expected to generate 1.48 times more return on investment than GGX Gold. However, Hummingbird Resources is 1.48 times more volatile than GGX Gold Corp. It trades about 0.01 of its potential returns per unit of risk. GGX Gold Corp is currently generating about -0.08 per unit of risk. If you would invest  2.30  in Hummingbird Resources PLC on September 12, 2024 and sell it today you would lose (0.20) from holding Hummingbird Resources PLC or give up 8.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Hummingbird Resources PLC  vs.  GGX Gold Corp

Hummingbird Resources PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hummingbird Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic 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.

GGX Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GGX Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic 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 Hummingbird Resources and GGX Gold

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

The idea behind Hummingbird Resources PLC and GGX Gold Corp 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.