Correlation Between Safe and Golden Arrow

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

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

Diversification Opportunities for Safe and Golden Arrow

-0.71

Correlation Coefficient

Safe  Golden Arrow

Pay attention - limited upside

The 3 months correlation between Safe and Golden is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Safe and Green and Golden Arrow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Arrow Resources and Safe 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 Safe and Green are associated (or correlated) with Golden Arrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Arrow Resources has no effect on the direction of Safe i.e., Safe and Golden Arrow go up and down completely randomly.

Pair Corralation between Safe and Golden Arrow

Considering the 90-day investment horizon Safe and Green is expected to under-perform the Golden Arrow. But the stock apears to be less risky and, when comparing its historical volatility, Safe and Green is 1.61 times less risky than Golden Arrow. The stock trades about -0.14 of its potential returns per unit of risk. The Golden Arrow Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Golden Arrow Resources on December 28, 2024 and sell it today you would earn a total of  0.83  from holding Golden Arrow Resources or generate 27.67% return on investment over 90 days.

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

Safe and Green  vs.  Golden Arrow Resources

Safe and Green

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safe and Green has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Golden Arrow Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Arrow Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Golden Arrow reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Safe and Golden Arrow

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

The idea behind Safe and Green and Golden Arrow 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.