Correlation Between Cerrado Gold and Thor Explorations
Can any of the company-specific risk be diversified away by investing in both Cerrado Gold and Thor Explorations 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 Cerrado Gold and Thor Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerrado Gold and Thor Explorations, you can compare the effects of market volatilities on Cerrado Gold and Thor Explorations 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 Cerrado Gold with a short position of Thor Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerrado Gold and Thor Explorations.
Diversification Opportunities for Cerrado Gold and Thor Explorations
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cerrado and Thor is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cerrado Gold and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations and Cerrado 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 Cerrado Gold are associated (or correlated) with Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Cerrado Gold i.e., Cerrado Gold and Thor Explorations go up and down completely randomly.
Pair Corralation between Cerrado Gold and Thor Explorations
Assuming the 90 days horizon Cerrado Gold is expected to under-perform the Thor Explorations. But the otc stock apears to be less risky and, when comparing its historical volatility, Cerrado Gold is 2.5 times less risky than Thor Explorations. The otc stock trades about -0.13 of its potential returns per unit of risk. The Thor Explorations is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Thor Explorations on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Thor Explorations or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerrado Gold vs. Thor Explorations
Performance |
| Timeline |
| Cerrado Gold |
| Thor Explorations |
Cerrado Gold and Thor Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerrado Gold and Thor Explorations
The main advantage of trading using opposite Cerrado Gold and Thor Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerrado Gold position performs unexpectedly, Thor Explorations 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 Thor Explorations will offset losses from the drop in Thor Explorations' long position.| Cerrado Gold vs. Antioquia Gold | Cerrado Gold vs. Red Pine Exploration | Cerrado Gold vs. Bellevue Gold Limited | Cerrado Gold vs. Asante Gold |
| Thor Explorations vs. Cabral Gold | Thor Explorations vs. Cartier Resources | Thor Explorations vs. Lion One Metals | Thor Explorations vs. Equinox Gold Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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