Correlation Between Paramount Gold and Gold Resource
Can any of the company-specific risk be diversified away by investing in both Paramount Gold and Gold Resource 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 Paramount Gold and Gold Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramount Gold Nevada and Gold Resource, you can compare the effects of market volatilities on Paramount Gold and Gold Resource 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 Paramount Gold with a short position of Gold Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Gold and Gold Resource.
Diversification Opportunities for Paramount Gold and Gold Resource
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Paramount and Gold is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Gold Nevada and Gold Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Resource and Paramount 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 Paramount Gold Nevada are associated (or correlated) with Gold Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Resource has no effect on the direction of Paramount Gold i.e., Paramount Gold and Gold Resource go up and down completely randomly.
Pair Corralation between Paramount Gold and Gold Resource
Considering the 90-day investment horizon Paramount Gold Nevada is expected to generate 0.55 times more return on investment than Gold Resource. However, Paramount Gold Nevada is 1.81 times less risky than Gold Resource. It trades about 0.3 of its potential returns per unit of risk. Gold Resource is currently generating about 0.09 per unit of risk. If you would invest 59.00 in Paramount Gold Nevada on June 12, 2025 and sell it today you would earn a total of 46.00 from holding Paramount Gold Nevada or generate 77.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Gold Nevada vs. Gold Resource
Performance |
| Timeline |
| Paramount Gold Nevada |
| Gold Resource |
Paramount Gold and Gold Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Gold and Gold Resource
The main advantage of trading using opposite Paramount Gold and Gold Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Gold position performs unexpectedly, Gold Resource 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 Gold Resource will offset losses from the drop in Gold Resource's long position.| Paramount Gold vs. Osisko Development Corp | Paramount Gold vs. Osisko Development Corp | Paramount Gold vs. Gold Royalty Corp | Paramount Gold vs. Morningstar Unconstrained Allocation |
| Gold Resource vs. Endeavour Silver Corp | Gold Resource vs. Fortitude Gold Corp | Gold Resource vs. Galiano Gold | Gold Resource vs. GoldMining |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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