Correlation Between Golden Star and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both Golden Star and Labrador Gold 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 Labrador Gold 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 Labrador Gold Corp, you can compare the effects of market volatilities on Golden Star and Labrador Gold 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 Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Labrador Gold.
Diversification Opportunities for Golden Star and Labrador Gold
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Labrador is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold Corp 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 Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of Golden Star i.e., Golden Star and Labrador Gold go up and down completely randomly.
Pair Corralation between Golden Star and Labrador Gold
Given the investment horizon of 90 days Golden Star Resource is expected to under-perform the Labrador Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Golden Star Resource is 1.73 times less risky than Labrador Gold. The otc stock trades about -0.13 of its potential returns per unit of risk. The Labrador Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Labrador Gold Corp on December 1, 2024 and sell it today you would earn a total of 1.00 from holding Labrador Gold Corp or generate 22.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 93.75% |
Values | Daily Returns |
Golden Star Resource vs. Labrador Gold Corp
Performance |
Timeline |
Golden Star Resource |
Labrador Gold Corp |
Golden Star and Labrador Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Star and Labrador Gold
The main advantage of trading using opposite Golden Star and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, Labrador Gold 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 Labrador Gold will offset losses from the drop in Labrador Gold's long position.Golden Star vs. Franklin Wireless Corp | Golden Star vs. JBG SMITH Properties | Golden Star vs. United Guardian | Golden Star vs. GMxico Transportes SAB |
Labrador Gold vs. Exploits Discovery Corp | Labrador Gold vs. Mako Mining Corp | Labrador Gold vs. Puma Exploration | Labrador Gold vs. Aurion Resources |
Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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