Correlation Between CHKEZ Old and GoGold Resources

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

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

Diversification Opportunities for CHKEZ Old and GoGold Resources

0.0

Correlation Coefficient

CHKEZ Old  GoGold Resources

Pay attention - limited upside

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

Pair Corralation between CHKEZ Old and GoGold Resources

If you would invest  75.00  in GoGold Resources on December 30, 2024 and sell it today you would earn a total of  49.00  from holding GoGold Resources or generate 65.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CHKEZ Old  vs.  GoGold Resources

CHKEZ Old

Risk-Adjusted Performance

Very Weak

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

GoGold Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GoGold Resources are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, GoGold Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHKEZ Old and GoGold Resources

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

The idea behind CHKEZ Old and GoGold Resources 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.