Correlation Between Herald Investment and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Herald Investment and Thor Mining 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 Herald Investment and Thor Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herald Investment Trust and Thor Mining PLC, you can compare the effects of market volatilities on Herald Investment and Thor Mining 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 Herald Investment with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and Thor Mining.
Diversification Opportunities for Herald Investment and Thor Mining
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Herald and Thor is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and Herald Investment 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 Herald Investment Trust are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Herald Investment i.e., Herald Investment and Thor Mining go up and down completely randomly.
Pair Corralation between Herald Investment and Thor Mining
Assuming the 90 days trading horizon Herald Investment is expected to generate 3.79 times less return on investment than Thor Mining. But when comparing it to its historical volatility, Herald Investment Trust is 3.2 times less risky than Thor Mining. It trades about 0.09 of its potential returns per unit of risk. Thor Mining PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 65.00 in Thor Mining PLC on October 11, 2024 and sell it today you would earn a total of 5.00 from holding Thor Mining PLC or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herald Investment Trust vs. Thor Mining PLC
Performance |
| Timeline |
| Herald Investment Trust |
| Thor Mining PLC |
Herald Investment and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herald Investment and Thor Mining
The main advantage of trading using opposite Herald Investment and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment position performs unexpectedly, Thor Mining 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 Mining will offset losses from the drop in Thor Mining's long position.| Herald Investment vs. Cizzle Biotechnology Holdings | Herald Investment vs. Arrow Electronics | Herald Investment vs. SMA Solar Technology | Herald Investment vs. Darden Restaurants |
| Thor Mining vs. Lindsell Train Investment | Thor Mining vs. FC Investment Trust | Thor Mining vs. Prosiebensat 1 Media | Thor Mining vs. Herald Investment Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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