Correlation Between GoGold Resources and Aclara Resources

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

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

Diversification Opportunities for GoGold Resources and Aclara Resources

0.15

Correlation Coefficient

GoGold Resources  Aclara Resources

Average diversification

The 3 months correlation between GoGold and Aclara is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Aclara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclara Resources and GoGold 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 GoGold Resources are associated (or correlated) with Aclara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclara Resources has no effect on the direction of GoGold Resources i.e., GoGold Resources and Aclara Resources go up and down completely randomly.

Pair Corralation between GoGold Resources and Aclara Resources

Assuming the 90 days trading horizon GoGold Resources is expected to under-perform the Aclara Resources. But the stock apears to be less risky and, when comparing its historical volatility, GoGold Resources is 1.68 times less risky than Aclara Resources. The stock trades about -0.07 of its potential returns per unit of risk. The Aclara Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Aclara Resources on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Aclara Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GoGold Resources  vs.  Aclara Resources

GoGold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoGold Resources 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 fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aclara Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aclara Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aclara Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GoGold Resources and Aclara Resources

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

The idea behind GoGold Resources and Aclara 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.