Correlation Between Decade Resources and Thunder Gold
Can any of the company-specific risk be diversified away by investing in both Decade Resources and Thunder 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 Decade Resources and Thunder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Decade Resources and Thunder Gold Corp, you can compare the effects of market volatilities on Decade Resources and Thunder 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 Decade Resources with a short position of Thunder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Decade Resources and Thunder Gold.
Diversification Opportunities for Decade Resources and Thunder Gold
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Decade and Thunder is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Decade Resources and Thunder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Gold Corp and Decade 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 Decade Resources are associated (or correlated) with Thunder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Gold Corp has no effect on the direction of Decade Resources i.e., Decade Resources and Thunder Gold go up and down completely randomly.
Pair Corralation between Decade Resources and Thunder Gold
Assuming the 90 days horizon Decade Resources is expected to generate 1.16 times more return on investment than Thunder Gold. However, Decade Resources is 1.16 times more volatile than Thunder Gold Corp. It trades about 0.06 of its potential returns per unit of risk. Thunder Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 2.80 in Decade Resources on November 27, 2024 and sell it today you would lose (0.30) from holding Decade Resources or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Decade Resources vs. Thunder Gold Corp
Performance |
| Timeline |
| Decade Resources |
| Thunder Gold Corp |
Decade Resources and Thunder Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Decade Resources and Thunder Gold
The main advantage of trading using opposite Decade Resources and Thunder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Decade Resources position performs unexpectedly, Thunder 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 Thunder Gold will offset losses from the drop in Thunder Gold's long position.| Decade Resources vs. First American Silver | Decade Resources vs. Australian Vanadium Limited | Decade Resources vs. International Lithium Corp | Decade Resources vs. Wealth Minerals |
| Thunder Gold vs. Elite Education Group | Thunder Gold vs. Vasta Platform | Thunder Gold vs. Pearson PLC ADR | Thunder Gold vs. Barrick 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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