Correlation Between Clarity Gold and Sassy Resources

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

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

Diversification Opportunities for Clarity Gold and Sassy Resources

-0.38

Correlation Coefficient

Clarity Gold  Sassy Resources

Very good diversification

The 3 months correlation between Clarity and Sassy is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Clarity Gold Corp and Sassy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sassy Resources and Clarity 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 Clarity Gold Corp are associated (or correlated) with Sassy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sassy Resources has no effect on the direction of Clarity Gold i.e., Clarity Gold and Sassy Resources go up and down completely randomly.

Pair Corralation between Clarity Gold and Sassy Resources

Assuming the 90 days horizon Clarity Gold Corp is expected to generate 1.72 times more return on investment than Sassy Resources. However, Clarity Gold is 1.72 times more volatile than Sassy Resources. It trades about 0.11 of its potential returns per unit of risk. Sassy Resources is currently generating about -0.01 per unit of risk. If you would invest  1.70  in Clarity Gold Corp on May 6, 2025 and sell it today you would earn a total of  0.94  from holding Clarity Gold Corp or generate 55.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Clarity Gold Corp  vs.  Sassy Resources

Clarity Gold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clarity Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Clarity Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Sassy Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sassy Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sassy Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Clarity Gold and Sassy Resources

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

The idea behind Clarity Gold Corp and Sassy Resources 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.