Correlation Between Goliath Resources and Gold79 Mines

Can any of the company-specific risk be diversified away by investing in both Goliath Resources and Gold79 Mines 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 Gold79 Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goliath Resources Limited and Gold79 Mines, you can compare the effects of market volatilities on Goliath Resources and Gold79 Mines 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 Gold79 Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goliath Resources and Gold79 Mines.

Diversification Opportunities for Goliath Resources and Gold79 Mines

0.33

Correlation Coefficient

Goliath Resources  Gold79 Mines

Weak diversification

The 3 months correlation between Goliath and Gold79 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Goliath Resources Limited and Gold79 Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold79 Mines 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 Limited are associated (or correlated) with Gold79 Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold79 Mines has no effect on the direction of Goliath Resources i.e., Goliath Resources and Gold79 Mines go up and down completely randomly.

Pair Corralation between Goliath Resources and Gold79 Mines

Assuming the 90 days horizon Goliath Resources Limited is expected to generate 1.41 times more return on investment than Gold79 Mines. However, Goliath Resources is 1.41 times more volatile than Gold79 Mines. It trades about 0.15 of its potential returns per unit of risk. Gold79 Mines is currently generating about 0.21 per unit of risk. If you would invest  70.00  in Goliath Resources Limited on December 30, 2024 and sell it today you would earn a total of  48.00  from holding Goliath Resources Limited or generate 68.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Goliath Resources Limited  vs.  Gold79 Mines

Goliath Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goliath Resources Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goliath Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Gold79 Mines

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold79 Mines are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold79 Mines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goliath Resources and Gold79 Mines

The main advantage of trading using opposite Goliath Resources and Gold79 Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goliath Resources position performs unexpectedly, Gold79 Mines 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 Gold79 Mines will offset losses from the drop in Gold79 Mines' long position.

The idea behind Goliath Resources Limited and Gold79 Mines 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.