Correlation Between Cartier Iron and Goliath Resources

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

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

Diversification Opportunities for Cartier Iron and Goliath Resources

0.48

Correlation Coefficient

Cartier Iron  Goliath Resources

Very weak diversification

The 3 months correlation between Cartier and Goliath is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cartier Iron Corp and Goliath Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and Cartier Iron 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 Cartier Iron Corp 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 Cartier Iron i.e., Cartier Iron and Goliath Resources go up and down completely randomly.

Pair Corralation between Cartier Iron and Goliath Resources

Assuming the 90 days horizon Cartier Iron Corp is expected to generate 4.01 times more return on investment than Goliath Resources. However, Cartier Iron is 4.01 times more volatile than Goliath Resources Limited. It trades about 0.12 of its potential returns per unit of risk. Goliath Resources Limited is currently generating about 0.15 per unit of risk. If you would invest  6.07  in Cartier Iron Corp on December 30, 2024 and sell it today you would earn a total of  3.93  from holding Cartier Iron Corp or generate 64.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

Cartier Iron Corp  vs.  Goliath Resources Limited

Cartier Iron Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cartier Iron Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, Cartier Iron reported solid returns over the last few months and may actually be approaching a breakup point.

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 Cartier Iron and Goliath Resources

The main advantage of trading using opposite Cartier Iron and Goliath Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartier Iron 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 Cartier Iron Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.