Correlation Between Geo Energy and Thungela Resources
Can any of the company-specific risk be diversified away by investing in both Geo Energy and Thungela Resources 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 Geo Energy and Thungela Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geo Energy Resources and Thungela Resources Limited, you can compare the effects of market volatilities on Geo Energy and Thungela Resources 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 Geo Energy with a short position of Thungela Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geo Energy and Thungela Resources.
Diversification Opportunities for Geo Energy and Thungela Resources
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geo and Thungela is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Geo Energy Resources and Thungela Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thungela Resources and Geo Energy 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 Geo Energy Resources are associated (or correlated) with Thungela Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thungela Resources has no effect on the direction of Geo Energy i.e., Geo Energy and Thungela Resources go up and down completely randomly.
Pair Corralation between Geo Energy and Thungela Resources
If you would invest 665.00 in Thungela Resources Limited on November 1, 2024 and sell it today you would earn a total of 41.00 from holding Thungela Resources Limited or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
Geo Energy Resources vs. Thungela Resources Limited
Performance |
| Timeline |
| Geo Energy Resources |
| Thungela Resources |
Geo Energy and Thungela Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geo Energy and Thungela Resources
The main advantage of trading using opposite Geo Energy and Thungela Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geo Energy position performs unexpectedly, Thungela Resources 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 Thungela Resources will offset losses from the drop in Thungela Resources' long position.| Geo Energy vs. Yanzhou Coal Mining | Geo Energy vs. Indo Tambangraya Megah | Geo Energy vs. Bukit Asam Tbk | Geo Energy vs. Thungela Resources Limited |
| Thungela Resources vs. Adaro Energy Tbk | Thungela Resources vs. Geo Energy Resources | Thungela Resources vs. Bukit Asam Tbk | Thungela Resources vs. New Hope |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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