Correlation Between Royal Canadian and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Royal Canadian and GoGold 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 Royal Canadian and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Canadian Mint and GoGold Resources, you can compare the effects of market volatilities on Royal Canadian and GoGold 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 Royal Canadian with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Canadian and GoGold Resources.
Diversification Opportunities for Royal Canadian and GoGold Resources
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Royal and GoGold is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Royal Canadian Mint and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Royal Canadian 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 Royal Canadian Mint are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Royal Canadian i.e., Royal Canadian and GoGold Resources go up and down completely randomly.
Pair Corralation between Royal Canadian and GoGold Resources
Assuming the 90 days trading horizon Royal Canadian is expected to generate 2.48 times less return on investment than GoGold Resources. But when comparing it to its historical volatility, Royal Canadian Mint is 3.28 times less risky than GoGold Resources. It trades about 0.28 of its potential returns per unit of risk. GoGold Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 108.00 in GoGold Resources on February 19, 2024 and sell it today you would earn a total of 57.00 from holding GoGold Resources or generate 52.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Royal Canadian Mint vs. GoGold Resources
Performance |
Timeline |
Royal Canadian Mint |
GoGold Resources |
Royal Canadian and GoGold Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Royal Canadian and GoGold Resources
The main advantage of trading using opposite Royal Canadian and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Canadian position performs unexpectedly, GoGold 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.Royal Canadian vs. Senvest Capital | Royal Canadian vs. Bank of Montreal | Royal Canadian vs. Bank of Montreal | Royal Canadian vs. Royal Bank of |
GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |