Correlation Between Revival Gold and Goldshore Resources

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

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

Diversification Opportunities for Revival Gold and Goldshore Resources

0.68

Correlation Coefficient

Revival Gold  Goldshore Resources

Poor diversification

The 3 months correlation between Revival and Goldshore is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Revival Gold and Goldshore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldshore Resources and Revival 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 Revival Gold are associated (or correlated) with Goldshore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldshore Resources has no effect on the direction of Revival Gold i.e., Revival Gold and Goldshore Resources go up and down completely randomly.

Pair Corralation between Revival Gold and Goldshore Resources

Assuming the 90 days horizon Revival Gold is expected to generate 0.86 times more return on investment than Goldshore Resources. However, Revival Gold is 1.16 times less risky than Goldshore Resources. It trades about 0.16 of its potential returns per unit of risk. Goldshore Resources is currently generating about 0.12 per unit of risk. If you would invest  18.00  in Revival Gold on December 28, 2024 and sell it today you would earn a total of  10.00  from holding Revival Gold or generate 55.56% return on investment over 90 days.

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

Revival Gold  vs.  Goldshore Resources

Revival Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Revival Gold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Revival Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Goldshore Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldshore Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goldshore Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Revival Gold and Goldshore Resources

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

The idea behind Revival Gold and Goldshore 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..