Correlation Between Goliath Resources and Maximus

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

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

Diversification Opportunities for Goliath Resources and Maximus

-0.49

Correlation Coefficient

Goliath Resources  Maximus

Very good diversification

The 3 months correlation between Goliath and Maximus is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Goliath Resources Limited and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus and Goliath 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 Goliath Resources Limited are associated (or correlated) with Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Goliath Resources i.e., Goliath Resources and Maximus go up and down completely randomly.

Pair Corralation between Goliath Resources and Maximus

Assuming the 90 days horizon Goliath Resources Limited is expected to generate 4.01 times more return on investment than Maximus. However, Goliath Resources is 4.01 times more volatile than Maximus. It trades about 0.22 of its potential returns per unit of risk. Maximus is currently generating about -0.11 per unit of risk. If you would invest  57.00  in Goliath Resources Limited on January 25, 2024 and sell it today you would earn a total of  10.00  from holding Goliath Resources Limited or generate 17.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Goliath Resources Limited  vs.  Maximus

Goliath Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goliath Resources Limited 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.

Maximus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maximus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Maximus is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goliath Resources and Maximus

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

The idea behind Goliath Resources Limited and Maximus 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.