Correlation Between Goldbank Mining and Goldcliff Resource

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

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

Diversification Opportunities for Goldbank Mining and Goldcliff Resource

0.62

Correlation Coefficient

Goldbank Mining  Goldcliff Resource

Poor diversification

The 3 months correlation between Goldbank and Goldcliff is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Goldbank Mining Corp and Goldcliff Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldcliff Resource Corp and Goldbank Mining 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 Goldbank Mining Corp are associated (or correlated) with Goldcliff Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldcliff Resource Corp has no effect on the direction of Goldbank Mining i.e., Goldbank Mining and Goldcliff Resource go up and down completely randomly.

Pair Corralation between Goldbank Mining and Goldcliff Resource

Assuming the 90 days horizon Goldbank Mining is expected to generate 5.67 times less return on investment than Goldcliff Resource. But when comparing it to its historical volatility, Goldbank Mining Corp is 10.69 times less risky than Goldcliff Resource. It trades about 0.08 of its potential returns per unit of risk. Goldcliff Resource Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Goldcliff Resource Corp on December 22, 2024 and sell it today you would lose (0.50) from holding Goldcliff Resource Corp or give up 16.67% of portfolio value over 90 days.

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

Goldbank Mining Corp  vs.  Goldcliff Resource Corp

Goldbank Mining Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldbank Mining Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Goldbank Mining is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Goldcliff Resource Corp

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Goldbank Mining and Goldcliff Resource

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

The idea behind Goldbank Mining Corp and Goldcliff Resource Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.