Correlation Between Golden Star and Eloro Resources

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

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

Diversification Opportunities for Golden Star and Eloro Resources

-0.16

Correlation Coefficient

Golden Star  Eloro Resources

Good diversification

The 3 months correlation between Golden and Eloro is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Eloro Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eloro Resources and Golden Star 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 Star Resource are associated (or correlated) with Eloro Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eloro Resources has no effect on the direction of Golden Star i.e., Golden Star and Eloro Resources go up and down completely randomly.

Pair Corralation between Golden Star and Eloro Resources

Given the investment horizon of 90 days Golden Star Resource is expected to under-perform the Eloro Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Golden Star Resource is 1.23 times less risky than Eloro Resources. The otc stock trades about -0.13 of its potential returns per unit of risk. The Eloro Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  58.00  in Eloro Resources on December 29, 2024 and sell it today you would earn a total of  5.00  from holding Eloro Resources or generate 8.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Golden Star Resource  vs.  Eloro Resources

Golden Star Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Star Resource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Eloro Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eloro Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Eloro Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Star and Eloro Resources

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

The idea behind Golden Star Resource and Eloro 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.