Correlation Between Gold Resource and Vista Gold

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

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

Diversification Opportunities for Gold Resource and Vista Gold

0.12

Correlation Coefficient

Gold Resource  Vista Gold

Average diversification

The 3 months correlation between Gold and Vista is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gold Resource and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Gold and Gold Resource 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 Gold Resource are associated (or correlated) with Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of Gold Resource i.e., Gold Resource and Vista Gold go up and down completely randomly.

Pair Corralation between Gold Resource and Vista Gold

Given the investment horizon of 90 days Gold Resource is expected to generate 1.53 times more return on investment than Vista Gold. However, Gold Resource is 1.53 times more volatile than Vista Gold. It trades about 0.02 of its potential returns per unit of risk. Vista Gold is currently generating about -0.01 per unit of risk. If you would invest  59.00  in Gold Resource on May 7, 2025 and sell it today you would lose (2.00) from holding Gold Resource or give up 3.39% of portfolio value over 90 days.

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

Gold Resource  vs.  Vista Gold

Gold Resource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Resource are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Gold Resource may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vista Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vista Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Vista Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gold Resource and Vista Gold

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

The idea behind Gold Resource and Vista Gold 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.