Correlation Between FireFox Gold and Goliath Resources

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

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

Diversification Opportunities for FireFox Gold and Goliath Resources

0.7

Correlation Coefficient

FireFox Gold  Goliath Resources

Poor diversification

The 3 months correlation between FireFox and Goliath is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding FireFox Gold Corp and Goliath Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources and FireFox 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 FireFox Gold Corp are associated (or correlated) with Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of FireFox Gold i.e., FireFox Gold and Goliath Resources go up and down completely randomly.

Pair Corralation between FireFox Gold and Goliath Resources

Assuming the 90 days horizon FireFox Gold Corp is expected to generate 2.14 times more return on investment than Goliath Resources. However, FireFox Gold is 2.14 times more volatile than Goliath Resources Limited. It trades about 0.1 of its potential returns per unit of risk. Goliath Resources Limited is currently generating about 0.03 per unit of risk. If you would invest  2.94  in FireFox Gold Corp on May 5, 2025 and sell it today you would earn a total of  1.12  from holding FireFox Gold Corp or generate 38.1% return on investment over 90 days.

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

FireFox Gold Corp  vs.  Goliath Resources Limited

FireFox Gold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FireFox Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FireFox Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Goliath Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goliath Resources Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goliath Resources may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with FireFox Gold and Goliath Resources

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

The idea behind FireFox Gold Corp and Goliath Resources Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.