Correlation Between Gold Road and ODYSSEY GOLD
Can any of the company-specific risk be diversified away by investing in both Gold Road and ODYSSEY GOLD 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 ODYSSEY GOLD 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 ODYSSEY GOLD LTD, you can compare the effects of market volatilities on Gold Road and ODYSSEY GOLD 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 ODYSSEY GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and ODYSSEY GOLD.
Diversification Opportunities for Gold Road and ODYSSEY GOLD
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and ODYSSEY is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and ODYSSEY GOLD LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODYSSEY GOLD LTD 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 ODYSSEY GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODYSSEY GOLD LTD has no effect on the direction of Gold Road i.e., Gold Road and ODYSSEY GOLD go up and down completely randomly.
Pair Corralation between Gold Road and ODYSSEY GOLD
Assuming the 90 days horizon Gold Road Resources is expected to generate 0.29 times more return on investment than ODYSSEY GOLD. However, Gold Road Resources is 3.49 times less risky than ODYSSEY GOLD. It trades about 0.1 of its potential returns per unit of risk. ODYSSEY GOLD LTD is currently generating about -0.01 per unit of risk. If you would invest 104.00 in Gold Road Resources on September 29, 2024 and sell it today you would earn a total of 15.00 from holding Gold Road Resources or generate 14.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gold Road Resources vs. ODYSSEY GOLD LTD
Performance |
Timeline |
Gold Road Resources |
ODYSSEY GOLD LTD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gold Road and ODYSSEY GOLD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gold Road and ODYSSEY GOLD
The main advantage of trading using opposite Gold Road and ODYSSEY GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, ODYSSEY GOLD 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 ODYSSEY GOLD will offset losses from the drop in ODYSSEY GOLD's long position.Gold Road vs. Check Point Software | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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