Correlation Between Goliath Resources and Thesis Gold

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

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

Diversification Opportunities for Goliath Resources and Thesis Gold

0.79

Correlation Coefficient

Goliath Resources  Thesis Gold

Poor diversification

The 3 months correlation between Goliath and Thesis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Goliath Resources and Thesis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thesis Gold 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 Thesis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thesis Gold has no effect on the direction of Goliath Resources i.e., Goliath Resources and Thesis Gold go up and down completely randomly.

Pair Corralation between Goliath Resources and Thesis Gold

Assuming the 90 days horizon Goliath Resources is expected to generate 0.78 times more return on investment than Thesis Gold. However, Goliath Resources is 1.28 times less risky than Thesis Gold. It trades about -0.04 of its potential returns per unit of risk. Thesis Gold is currently generating about -0.04 per unit of risk. If you would invest  126.00  in Goliath Resources on September 3, 2024 and sell it today you would lose (12.00) from holding Goliath Resources or give up 9.52% of portfolio value over 90 days.

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

Goliath Resources  vs.  Thesis Gold

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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Thesis Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thesis Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Goliath Resources and Thesis Gold

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

The idea behind Goliath Resources and Thesis Gold 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.