Correlation Between Infinico Metals and Tinka Resources
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and Tinka 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 Infinico Metals and Tinka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinico Metals Corp and Tinka Resources Limited, you can compare the effects of market volatilities on Infinico Metals and Tinka 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 Infinico Metals with a short position of Tinka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and Tinka Resources.
Diversification Opportunities for Infinico Metals and Tinka Resources
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Infinico and Tinka is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Tinka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinka Resources and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Tinka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinka Resources has no effect on the direction of Infinico Metals i.e., Infinico Metals and Tinka Resources go up and down completely randomly.
Pair Corralation between Infinico Metals and Tinka Resources
Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the Tinka Resources. In addition to that, Infinico Metals is 1.98 times more volatile than Tinka Resources Limited. It trades about -0.17 of its total potential returns per unit of risk. Tinka Resources Limited is currently generating about -0.12 per unit of volatility. If you would invest 11.00 in Tinka Resources Limited on August 29, 2024 and sell it today you would lose (1.50) from holding Tinka Resources Limited or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Infinico Metals Corp vs. Tinka Resources Limited
Performance |
| Timeline |
| Infinico Metals Corp |
| Tinka Resources |
Infinico Metals and Tinka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and Tinka Resources
The main advantage of trading using opposite Infinico Metals and Tinka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, Tinka 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 Tinka Resources will offset losses from the drop in Tinka Resources' long position.The idea behind Infinico Metals Corp and Tinka Resources Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tinka Resources vs. First Majestic Silver | Tinka Resources vs. Ivanhoe Energy | Tinka Resources vs. Orezone Gold Corp | Tinka Resources vs. Faraday Copper 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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