Correlation Between Gold Road and ODYSSEY GOLD

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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

GoldODYSSEYDiversified AwayGoldODYSSEYDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gold Road Resources  vs.  ODYSSEY GOLD LTD

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10010203040
JavaScript chart by amCharts 3.21.15E6Q ODQ
       Timeline  
Gold Road Resources 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.051.11.151.21.251.3
ODYSSEY GOLD LTD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ODYSSEY GOLD LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ODYSSEY GOLD is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gold Road and ODYSSEY GOLD Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.18-5.38-3.58-1.77-0.03011.863.775.697.619.53 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15E6Q ODQ
       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.
The idea behind Gold Road Resources and ODYSSEY GOLD LTD 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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