Correlation Between Japan Gold and GFG Resources
Can any of the company-specific risk be diversified away by investing in both Japan Gold and GFG 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 Japan Gold and GFG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Gold Corp and GFG Resources, you can compare the effects of market volatilities on Japan Gold and GFG 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 Japan Gold with a short position of GFG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Gold and GFG Resources.
Diversification Opportunities for Japan Gold and GFG Resources
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Japan and GFG is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Japan Gold Corp and GFG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFG Resources and Japan Gold 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 Japan Gold Corp are associated (or correlated) with GFG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFG Resources has no effect on the direction of Japan Gold i.e., Japan Gold and GFG Resources go up and down completely randomly.
Pair Corralation between Japan Gold and GFG Resources
Assuming the 90 days horizon Japan Gold Corp is expected to generate 7.54 times more return on investment than GFG Resources. However, Japan Gold is 7.54 times more volatile than GFG Resources. It trades about 0.15 of its potential returns per unit of risk. GFG Resources is currently generating about -0.22 per unit of risk. If you would invest 4.90 in Japan Gold Corp on December 1, 2024 and sell it today you would earn a total of 1.33 from holding Japan Gold Corp or generate 27.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Japan Gold Corp vs. GFG Resources
Performance |
Timeline |
Japan Gold Corp |
GFG Resources |
Japan Gold and GFG Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Japan Gold and GFG Resources
The main advantage of trading using opposite Japan Gold and GFG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Gold position performs unexpectedly, GFG 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 GFG Resources will offset losses from the drop in GFG Resources' long position.Japan Gold vs. Robex Resources | Japan Gold vs. Rover Metals Corp | Japan Gold vs. Orefinders Resources | Japan Gold vs. Labrador Gold Corp |
GFG Resources vs. Japan Gold Corp | GFG Resources vs. Robex Resources | GFG Resources vs. Rover Metals Corp | GFG Resources vs. Orefinders 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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