Correlation Between Polymetal International and Goliath Resources

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

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

Diversification Opportunities for Polymetal International and Goliath Resources

0.0

Correlation Coefficient

Polymetal International  Goliath Resources

Pay attention - limited upside

The 3 months correlation between Polymetal and Goliath is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Polymetal International PLC and Goliath Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and Polymetal International 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 Polymetal International PLC are associated (or correlated) with Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Polymetal International i.e., Polymetal International and Goliath Resources go up and down completely randomly.

Pair Corralation between Polymetal International and Goliath Resources

If you would invest  72.00  in Goliath Resources Limited on December 31, 2024 and sell it today you would earn a total of  46.00  from holding Goliath Resources Limited or generate 63.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Polymetal International PLC  vs.  Goliath Resources Limited

Polymetal International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polymetal International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Polymetal International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goliath Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goliath Resources Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goliath Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Polymetal International and Goliath Resources

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

The idea behind Polymetal International PLC and Goliath Resources Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.