Correlation Between Focus Graphite and Golden Goliath

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

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

Diversification Opportunities for Focus Graphite and Golden Goliath

0.31

Correlation Coefficient

Focus Graphite  Golden Goliath

Weak diversification

The 3 months correlation between Focus and Golden is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Golden Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Goliath Resources and Focus Graphite 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 Focus Graphite are associated (or correlated) with Golden Goliath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Goliath Resources has no effect on the direction of Focus Graphite i.e., Focus Graphite and Golden Goliath go up and down completely randomly.

Pair Corralation between Focus Graphite and Golden Goliath

Assuming the 90 days horizon Focus Graphite is expected to under-perform the Golden Goliath. But the otc stock apears to be less risky and, when comparing its historical volatility, Focus Graphite is 11.71 times less risky than Golden Goliath. The otc stock trades about -0.02 of its potential returns per unit of risk. The Golden Goliath Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Golden Goliath Resources on October 7, 2024 and sell it today you would lose (0.80) from holding Golden Goliath Resources or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.53%
Values	Daily Returns

Focus Graphite  vs.  Golden Goliath Resources

Focus Graphite

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Graphite are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Focus Graphite may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Golden Goliath Resources

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Goliath Resources are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Golden Goliath reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Focus Graphite and Golden Goliath

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

The idea behind Focus Graphite and Golden Goliath Resources 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.