Correlation Between Centerra Gold and Torex Gold
Can any of the company-specific risk be diversified away by investing in both Centerra Gold 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 Centerra Gold and Torex Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerra Gold and Torex Gold Resources, you can compare the effects of market volatilities on Centerra Gold 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 Centerra Gold with a short position of Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerra Gold and Torex Gold.
Diversification Opportunities for Centerra Gold and Torex Gold
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Centerra and Torex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Centerra 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 Centerra 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 Centerra 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 Centerra Gold i.e., Centerra Gold and Torex Gold go up and down completely randomly.
Pair Corralation between Centerra Gold and Torex Gold
Assuming the 90 days horizon Centerra Gold is expected to generate 2.39 times less return on investment than Torex Gold. But when comparing it to its historical volatility, Centerra Gold is 1.13 times less risky than Torex Gold. It trades about 0.04 of its potential returns per unit of risk. Torex Gold Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,289 in Torex Gold Resources on August 25, 2024 and sell it today you would earn a total of 1,818 from holding Torex Gold Resources or generate 141.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerra Gold vs. Torex Gold Resources
Performance |
| Timeline |
| Centerra Gold |
| Torex Gold Resources |
Centerra Gold and Torex Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerra Gold and Torex Gold
The main advantage of trading using opposite Centerra Gold and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerra Gold 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.| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
| Torex Gold vs. OceanaGold | Torex Gold vs. Wesdome Gold Mines | Torex Gold vs. Centerra Gold | Torex Gold vs. Alamos Gold |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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