Correlation Between Goliath Resources and Brunswick Exploration

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

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

Diversification Opportunities for Goliath Resources and Brunswick Exploration

0.76

Correlation Coefficient

Goliath Resources  Brunswick Exploration

Poor diversification

The 3 months correlation between Goliath and Brunswick is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Goliath Resources and Brunswick Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Exploration and Goliath 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 Goliath Resources are associated (or correlated) with Brunswick Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Exploration has no effect on the direction of Goliath Resources i.e., Goliath Resources and Brunswick Exploration go up and down completely randomly.

Pair Corralation between Goliath Resources and Brunswick Exploration

Assuming the 90 days horizon Goliath Resources is expected to under-perform the Brunswick Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Goliath Resources is 1.5 times less risky than Brunswick Exploration. The stock trades about -0.04 of its potential returns per unit of risk. The Brunswick Exploration is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Brunswick Exploration on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Brunswick Exploration or generate 0.0% return on investment over 90 days.

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

Goliath Resources  vs.  Brunswick Exploration

Goliath Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goliath Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Brunswick Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Goliath Resources and Brunswick Exploration

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

The idea behind Goliath Resources and Brunswick Exploration 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.