Correlation Between GFG Resources and Treasury Metals

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

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

Diversification Opportunities for GFG Resources and Treasury Metals

0.0

Correlation Coefficient

GFG Resources  Treasury Metals

Pay attention - limited upside

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

Pair Corralation between GFG Resources and Treasury Metals

If you would invest  11.00  in GFG Resources on November 28, 2024 and sell it today you would earn a total of  2.00  from holding GFG Resources or generate 18.18% return on investment over 90 days.

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

GFG Resources  vs.  Treasury Metals

GFG Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GFG Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GFG Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Treasury Metals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GFG Resources and Treasury Metals

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

The idea behind GFG Resources and Treasury Metals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.