Correlation Between Global Resources and Goehring Rozencwajg

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

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

Diversification Opportunities for Global Resources and Goehring Rozencwajg

0.9

Correlation Coefficient

Global Resources  Goehring Rozencwajg

Almost no diversification

The 3 months correlation between Global and Goehring is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global Resources Fund and Goehring Rozencwajg Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goehring Rozencwajg and Global 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 Global Resources Fund are associated (or correlated) with Goehring Rozencwajg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goehring Rozencwajg has no effect on the direction of Global Resources i.e., Global Resources and Goehring Rozencwajg go up and down completely randomly.

Pair Corralation between Global Resources and Goehring Rozencwajg

Assuming the 90 days horizon Global Resources is expected to generate 2.43 times less return on investment than Goehring Rozencwajg. But when comparing it to its historical volatility, Global Resources Fund is 1.19 times less risky than Goehring Rozencwajg. It trades about 0.26 of its potential returns per unit of risk. Goehring Rozencwajg Resources is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest  1,227  in Goehring Rozencwajg Resources on October 26, 2024 and sell it today you would earn a total of  111.00  from holding Goehring Rozencwajg Resources or generate 9.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	94.74%
Values	Daily Returns

Global Resources Fund  vs.  Goehring Rozencwajg Resources

Global Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Resources Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Global Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goehring Rozencwajg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goehring Rozencwajg Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Goehring Rozencwajg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Resources and Goehring Rozencwajg

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

The idea behind Global Resources Fund and Goehring Rozencwajg Resources 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.