Correlation Between Golden Ridge and Cogeco Communications

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

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

Diversification Opportunities for Golden Ridge and Cogeco Communications

0.0

Correlation Coefficient

Golden Ridge  Cogeco Communications

Pay attention - limited upside

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

Pair Corralation between Golden Ridge and Cogeco Communications

If you would invest  8.00  in Golden Ridge Resources on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Golden Ridge Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Golden Ridge Resources  vs.  Cogeco Communications

Golden Ridge Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ridge Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Golden Ridge is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Cogeco Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cogeco Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic 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.

Pair Trading with Golden Ridge and Cogeco Communications

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

The idea behind Golden Ridge Resources and Cogeco Communications 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.