Correlation Between Flinders Resources and GoldMining

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

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

Diversification Opportunities for Flinders Resources and GoldMining

0.73

Correlation Coefficient

Flinders Resources  GoldMining

Poor diversification

The 3 months correlation between Flinders and GoldMining is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Flinders Resources 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 Flinders Resources Limited are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Flinders Resources i.e., Flinders Resources and GoldMining go up and down completely randomly.

Pair Corralation between Flinders Resources and GoldMining

Assuming the 90 days horizon Flinders Resources Limited is expected to under-perform the GoldMining. In addition to that, Flinders Resources is 2.2 times more volatile than GoldMining. It trades about -0.09 of its total potential returns per unit of risk. GoldMining is currently generating about -0.07 per unit of volatility. If you would invest  116.00  in GoldMining on April 20, 2025 and sell it today you would lose (11.00) from holding GoldMining or give up 9.48% of portfolio value over 90 days.

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

Flinders Resources Limited  vs.  GoldMining

Flinders Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flinders Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

GoldMining

Risk-Adjusted Performance

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Flinders Resources and GoldMining

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

The idea behind Flinders Resources Limited and GoldMining 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.