Correlation Between CP ALL and Golden Star

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

By analyzing existing cross correlation between CP ALL Public and Golden Star Resource, you can compare the effects of market volatilities on CP ALL and Golden Star 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 CP ALL with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Golden Star.

Diversification Opportunities for CP ALL and Golden Star

0.34

Correlation Coefficient

CP ALL  Golden Star

Weak diversification

The 3 months correlation between CVPBF and Golden is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Golden Star Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Resource and CP ALL 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 CP ALL Public are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Resource has no effect on the direction of CP ALL i.e., CP ALL and Golden Star go up and down completely randomly.

Pair Corralation between CP ALL and Golden Star

Assuming the 90 days horizon CP ALL Public is expected to generate 0.86 times more return on investment than Golden Star. However, CP ALL Public is 1.16 times less risky than Golden Star. It trades about -0.02 of its potential returns per unit of risk. Golden Star Resource is currently generating about -0.13 per unit of risk. If you would invest  180.00  in CP ALL Public on December 28, 2024 and sell it today you would lose (14.00) from holding CP ALL Public or give up 7.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

CP ALL Public  vs.  Golden Star Resource

CP ALL Public

Risk-Adjusted Performance

Very Weak

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

Golden Star Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Star Resource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CP ALL and Golden Star

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

The idea behind CP ALL Public and Golden Star Resource 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.