Correlation Between G2 Goldfields and Rio2

Can any of the company-specific risk be diversified away by investing in both G2 Goldfields and Rio2 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 G2 Goldfields and Rio2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G2 Goldfields and Rio2, you can compare the effects of market volatilities on G2 Goldfields and Rio2 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 G2 Goldfields with a short position of Rio2. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2 Goldfields and Rio2.

Diversification Opportunities for G2 Goldfields and Rio2

0.76

Correlation Coefficient

G2 Goldfields  Rio2

Poor diversification

The 3 months correlation between GTWO and Rio2 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding G2 Goldfields and Rio2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rio2 and G2 Goldfields 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 G2 Goldfields are associated (or correlated) with Rio2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rio2 has no effect on the direction of G2 Goldfields i.e., G2 Goldfields and Rio2 go up and down completely randomly.

Pair Corralation between G2 Goldfields and Rio2

Assuming the 90 days trading horizon G2 Goldfields is expected to generate 0.91 times more return on investment than Rio2. However, G2 Goldfields is 1.1 times less risky than Rio2. It trades about 0.22 of its potential returns per unit of risk. Rio2 is currently generating about 0.16 per unit of risk. If you would invest  302.00  in G2 Goldfields on August 19, 2025 and sell it today you would earn a total of  178.00  from holding G2 Goldfields or generate 58.94% return on investment over 90 days.

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

G2 Goldfields  vs.  Rio2

G2 Goldfields

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in G2 Goldfields are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, G2 Goldfields displayed solid returns over the last few months and may actually be approaching a breakup point.

Rio2

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rio2 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Rio2 displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G2 Goldfields and Rio2

The main advantage of trading using opposite G2 Goldfields and Rio2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2 Goldfields position performs unexpectedly, Rio2 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 Rio2 will offset losses from the drop in Rio2's long position.

The idea behind G2 Goldfields and Rio2 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 Commodity Directory module to find actively traded commodities issued by global exchanges.