Correlation Between Sitka Gold and Gold Springs

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

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

Diversification Opportunities for Sitka Gold and Gold Springs

-0.52

Correlation Coefficient

Sitka Gold  Gold Springs

Excellent diversification

The 3 months correlation between Sitka and Gold is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Gold Springs Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Springs Resource and Sitka 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 Sitka Gold Corp are associated (or correlated) with Gold Springs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Springs Resource has no effect on the direction of Sitka Gold i.e., Sitka Gold and Gold Springs go up and down completely randomly.

Pair Corralation between Sitka Gold and Gold Springs

Assuming the 90 days horizon Sitka Gold Corp is expected to generate 0.73 times more return on investment than Gold Springs. However, Sitka Gold Corp is 1.37 times less risky than Gold Springs. It trades about 0.17 of its potential returns per unit of risk. Gold Springs Resource is currently generating about -0.01 per unit of risk. If you would invest  50.00  in Sitka Gold Corp on July 22, 2025 and sell it today you would earn a total of  29.00  from holding Sitka Gold Corp or generate 58.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sitka Gold Corp  vs.  Gold Springs Resource

Sitka Gold Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sitka Gold Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Sitka Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Gold Springs Resource

Risk-Adjusted Performance

Weakest

Over the last 90 days Gold Springs Resource has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gold Springs is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sitka Gold and Gold Springs

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

The idea behind Sitka Gold Corp and Gold Springs 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.