Correlation Between Galantas Gold and Commander Resources

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

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

Diversification Opportunities for Galantas Gold and Commander Resources

-0.58

Correlation Coefficient

Galantas Gold  Commander Resources

Excellent diversification

The 3 months correlation between Galantas and Commander is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Galantas Gold Corp and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander Resources and Galantas Gold 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 Galantas Gold Corp are associated (or correlated) with Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of Galantas Gold i.e., Galantas Gold and Commander Resources go up and down completely randomly.

Pair Corralation between Galantas Gold and Commander Resources

Assuming the 90 days horizon Galantas Gold Corp is expected to under-perform the Commander Resources. But the stock apears to be less risky and, when comparing its historical volatility, Galantas Gold Corp is 1.14 times less risky than Commander Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Commander Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Commander Resources on October 7, 2024 and sell it today you would lose (0.50) from holding Commander Resources or give up 6.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Galantas Gold Corp  vs.  Commander Resources

Galantas Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galantas Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Commander Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Commander Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Commander Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galantas Gold and Commander Resources

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

The idea behind Galantas Gold Corp and Commander 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.