Correlation Between Surge Copper and Goliath Resources
Can any of the company-specific risk be diversified away by investing in both Surge Copper and Goliath 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 Surge Copper and Goliath Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surge Copper Corp and Goliath Resources, you can compare the effects of market volatilities on Surge Copper and Goliath 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 Surge Copper with a short position of Goliath Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Copper and Goliath Resources.
Diversification Opportunities for Surge Copper and Goliath Resources
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Surge and Goliath is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and Surge Copper 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 Surge Copper Corp are associated (or correlated) with Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Surge Copper i.e., Surge Copper and Goliath Resources go up and down completely randomly.
Pair Corralation between Surge Copper and Goliath Resources
Assuming the 90 days trading horizon Surge Copper Corp is expected to under-perform the Goliath Resources. In addition to that, Surge Copper is 1.52 times more volatile than Goliath Resources. It trades about -0.03 of its total potential returns per unit of risk. Goliath Resources is currently generating about 0.05 per unit of volatility. If you would invest 98.00 in Goliath Resources on September 15, 2024 and sell it today you would earn a total of 14.00 from holding Goliath Resources or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Surge Copper Corp vs. Goliath Resources
Performance |
Timeline |
Surge Copper Corp |
Goliath Resources |
Surge Copper and Goliath Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surge Copper and Goliath Resources
The main advantage of trading using opposite Surge Copper and Goliath Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Copper position performs unexpectedly, Goliath 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 Goliath Resources will offset losses from the drop in Goliath Resources' long position.Surge Copper vs. Kutcho Copper Corp | Surge Copper vs. CANEX Metals | Surge Copper vs. Highland Copper | Surge Copper vs. District Copper Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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