Correlation Between StrikePoint Gold and Garibaldi Resources

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

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

Diversification Opportunities for StrikePoint Gold and Garibaldi Resources

0.03

Correlation Coefficient

StrikePoint Gold  Garibaldi Resources

Significant diversification

The 3 months correlation between StrikePoint and Garibaldi is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding StrikePoint Gold and Garibaldi Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garibaldi Resources Corp and StrikePoint 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 StrikePoint Gold are associated (or correlated) with Garibaldi Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garibaldi Resources Corp has no effect on the direction of StrikePoint Gold i.e., StrikePoint Gold and Garibaldi Resources go up and down completely randomly.

Pair Corralation between StrikePoint Gold and Garibaldi Resources

Assuming the 90 days horizon StrikePoint Gold is expected to under-perform the Garibaldi Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, StrikePoint Gold is 1.91 times less risky than Garibaldi Resources. The otc stock trades about -0.01 of its potential returns per unit of risk. The Garibaldi Resources Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Garibaldi Resources Corp on September 13, 2024 and sell it today you would lose (0.90) from holding Garibaldi Resources Corp or give up 22.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

StrikePoint Gold  vs.  Garibaldi Resources Corp

StrikePoint Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StrikePoint Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Garibaldi Resources Corp

Risk-Adjusted Performance

6 of 100

OK

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

Pair Trading with StrikePoint Gold and Garibaldi Resources

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

The idea behind StrikePoint Gold and Garibaldi Resources Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.