Correlation Between Garibaldi Resources and Centor Energy

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

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

Diversification Opportunities for Garibaldi Resources and Centor Energy

0.0

Correlation Coefficient

Garibaldi Resources  Centor Energy

Pay attention - limited upside

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

Pair Corralation between Garibaldi Resources and Centor Energy

Assuming the 90 days horizon Garibaldi Resources Corp is expected to under-perform the Centor Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Garibaldi Resources Corp is 7.25 times less risky than Centor Energy. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Centor Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Centor Energy on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Centor Energy or generate 9.223372036854776E16% return on investment over 90 days.

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

Garibaldi Resources Corp  vs.  Centor Energy

Garibaldi Resources Corp

Risk-Adjusted Performance

Insignificant

Over the last 90 days Garibaldi Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Centor Energy

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Centor Energy are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Centor Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garibaldi Resources and Centor Energy

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

The idea behind Garibaldi Resources Corp and Centor Energy 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 Stocks Directory module to find actively traded stocks across global markets.