Correlation Between Big Ridge and Torex Gold
Can any of the company-specific risk be diversified away by investing in both Big Ridge and Torex 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 Big Ridge and Torex Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Ridge Gold and Torex Gold Resources, you can compare the effects of market volatilities on Big Ridge and Torex 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 Big Ridge with a short position of Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Ridge and Torex Gold.
Diversification Opportunities for Big Ridge and Torex Gold
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Big and Torex is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Big Ridge Gold and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources and Big Ridge 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 Big Ridge Gold are associated (or correlated) with Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Big Ridge i.e., Big Ridge and Torex Gold go up and down completely randomly.
Pair Corralation between Big Ridge and Torex Gold
Assuming the 90 days horizon Big Ridge Gold is expected to under-perform the Torex Gold. In addition to that, Big Ridge is 1.88 times more volatile than Torex Gold Resources. It trades about -0.06 of its total potential returns per unit of risk. Torex Gold Resources is currently generating about -0.02 per unit of volatility. If you would invest 2,162 in Torex Gold Resources on September 1, 2024 and sell it today you would lose (61.00) from holding Torex Gold Resources or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Ridge Gold vs. Torex Gold Resources
Performance |
| Timeline |
| Big Ridge Gold |
| Torex Gold Resources |
Big Ridge and Torex Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Ridge and Torex Gold
The main advantage of trading using opposite Big Ridge and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Ridge position performs unexpectedly, Torex 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 Torex Gold will offset losses from the drop in Torex Gold's long position.| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
| Torex Gold vs. Fossil Group | Torex Gold vs. Procter Gamble | Torex Gold vs. Zhihu Inc ADR | Torex Gold vs. Northstar Clean Technologies |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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