Correlation Between GoGold Resources and Prosper Gold

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

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

Diversification Opportunities for GoGold Resources and Prosper Gold

-0.09

Correlation Coefficient

GoGold Resources  Prosper Gold

Good diversification

The 3 months correlation between GoGold and Prosper is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper Gold Corp and GoGold 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 GoGold Resources are associated (or correlated) with Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of GoGold Resources i.e., GoGold Resources and Prosper Gold go up and down completely randomly.

Pair Corralation between GoGold Resources and Prosper Gold

Assuming the 90 days trading horizon GoGold Resources is expected to generate 1.13 times less return on investment than Prosper Gold. But when comparing it to its historical volatility, GoGold Resources is 1.71 times less risky than Prosper Gold. It trades about 0.02 of its potential returns per unit of risk. Prosper Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Prosper Gold Corp on January 19, 2024 and sell it today you would lose (2.00) from holding Prosper Gold Corp or give up 15.38% of portfolio value over 90 days.

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

GoGold Resources  vs.  Prosper Gold Corp

GoGold Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GoGold Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, GoGold Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Prosper Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosper Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GoGold Resources and Prosper Gold

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

The idea behind GoGold Resources and Prosper Gold 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 Commodity Directory module to find actively traded commodities issued by global exchanges.