Correlation Between DRDGOLD Limited and Goldex Resources

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

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

Diversification Opportunities for DRDGOLD Limited and Goldex Resources

-0.16

Correlation Coefficient

DRDGOLD Limited  Goldex Resources

Good diversification

The 3 months correlation between DRDGOLD and Goldex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DRDGOLD Limited ADR and Goldex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldex Resources and DRDGOLD Limited 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 DRDGOLD Limited ADR are associated (or correlated) with Goldex Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldex Resources has no effect on the direction of DRDGOLD Limited i.e., DRDGOLD Limited and Goldex Resources go up and down completely randomly.

Pair Corralation between DRDGOLD Limited and Goldex Resources

Considering the 90-day investment horizon DRDGOLD Limited is expected to generate 1.73 times less return on investment than Goldex Resources. But when comparing it to its historical volatility, DRDGOLD Limited ADR is 1.87 times less risky than Goldex Resources. It trades about 0.05 of its potential returns per unit of risk. Goldex Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.30  in Goldex Resources on May 15, 2025 and sell it today you would earn a total of  0.10  from holding Goldex Resources or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

DRDGOLD Limited ADR  vs.  Goldex Resources

DRDGOLD Limited ADR

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in DRDGOLD Limited ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, DRDGOLD Limited may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Goldex Resources

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Goldex Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goldex Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DRDGOLD Limited and Goldex Resources

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

The idea behind DRDGOLD Limited ADR and Goldex 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.