Correlation Between Gold Road and BC0

Can any of the company-specific risk be diversified away by investing in both Gold Road and BC0 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 Gold Road and BC0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gold Road Resources and BC0, you can compare the effects of market volatilities on Gold Road and BC0 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 Gold Road with a short position of BC0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and BC0.

Diversification Opportunities for Gold Road and BC0

0.0

Correlation Coefficient

Gold Road  BC0

Pay attention - limited upside

The 3 months correlation between Gold and BC0 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and BC0 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC0 and Gold Road 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 Gold Road Resources are associated (or correlated) with BC0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC0 has no effect on the direction of Gold Road i.e., Gold Road and BC0 go up and down completely randomly.

Pair Corralation between Gold Road and BC0

If you would invest  114.00  in Gold Road Resources on October 6, 2024 and sell it today you would earn a total of  11.00  from holding Gold Road Resources or generate 9.65% return on investment over 90 days.

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

Gold Road Resources  vs.  BC0

Gold Road Resources

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.

BC0

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BC0 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, BC0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gold Road and BC0

The main advantage of trading using opposite Gold Road and BC0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, BC0 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 BC0 will offset losses from the drop in BC0's long position.

The idea behind Gold Road Resources and BC0 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.