Correlation Between DRDGOLD Limited and Gold Resource

Can any of the company-specific risk be diversified away by investing in both DRDGOLD Limited 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 DRDGOLD Limited and Gold Resource 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 Gold Resource, you can compare the effects of market volatilities on DRDGOLD Limited 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 DRDGOLD Limited with a short position of Gold Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRDGOLD Limited and Gold Resource.

Diversification Opportunities for DRDGOLD Limited and Gold Resource

0.86

Correlation Coefficient

DRDGOLD Limited  Gold Resource

Very poor diversification

The 3 months correlation between DRDGOLD and Gold is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding DRDGOLD Limited ADR and Gold Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Resource 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 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 DRDGOLD Limited i.e., DRDGOLD Limited and Gold Resource go up and down completely randomly.

Pair Corralation between DRDGOLD Limited and Gold Resource

Considering the 90-day investment horizon DRDGOLD Limited ADR is expected to generate 0.58 times more return on investment than Gold Resource. However, DRDGOLD Limited ADR is 1.72 times less risky than Gold Resource. It trades about 0.39 of its potential returns per unit of risk. Gold Resource is currently generating about 0.11 per unit of risk. If you would invest  1,335  in DRDGOLD Limited ADR on July 15, 2025 and sell it today you would earn a total of  1,620  from holding DRDGOLD Limited ADR or generate 121.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

DRDGOLD Limited ADR  vs.  Gold Resource

DRDGOLD Limited ADR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in DRDGOLD Limited ADR are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, DRDGOLD Limited exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gold Resource

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Resource are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Gold Resource displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DRDGOLD Limited and Gold Resource

The main advantage of trading using opposite DRDGOLD Limited and Gold Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRDGOLD Limited 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.

The idea behind DRDGOLD Limited ADR and Gold Resource 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.