Correlation Between Bonterra Resources and International Tower
Can any of the company-specific risk be diversified away by investing in both Bonterra Resources and International Tower 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 Bonterra Resources and International Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonterra Resources and International Tower Hill, you can compare the effects of market volatilities on Bonterra Resources and International Tower 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 Bonterra Resources with a short position of International Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonterra Resources and International Tower.
Diversification Opportunities for Bonterra Resources and International Tower
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bonterra and International is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bonterra Resources and International Tower Hill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Tower Hill and Bonterra 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 Bonterra Resources are associated (or correlated) with International Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Tower Hill has no effect on the direction of Bonterra Resources i.e., Bonterra Resources and International Tower go up and down completely randomly.
Pair Corralation between Bonterra Resources and International Tower
Assuming the 90 days horizon Bonterra Resources is expected to generate 1.47 times less return on investment than International Tower. In addition to that, Bonterra Resources is 1.18 times more volatile than International Tower Hill. It trades about 0.01 of its total potential returns per unit of risk. International Tower Hill is currently generating about 0.02 per unit of volatility. If you would invest 55.00 in International Tower Hill on September 3, 2024 and sell it today you would lose (9.00) from holding International Tower Hill or give up 16.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonterra Resources vs. International Tower Hill
Performance |
| Timeline |
| Bonterra Resources |
| International Tower Hill |
Bonterra Resources and International Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonterra Resources and International Tower
The main advantage of trading using opposite Bonterra Resources and International Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonterra Resources position performs unexpectedly, International Tower 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 International Tower will offset losses from the drop in International Tower's long position.| Bonterra Resources vs. Advantage Solutions | Bonterra Resources vs. Atlas Corp | Bonterra Resources vs. PureCycle Technologies | Bonterra Resources vs. WM Technology |
| International Tower vs. Vista Gold | International Tower vs. Golden Minerals | International Tower vs. Paramount Gold Nevada | International Tower vs. Tanzanian Royalty Exploration |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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