Correlation Between Lumia and TNR Gold
Can any of the company-specific risk be diversified away by investing in both Lumia and TNR 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 Lumia and TNR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and TNR Gold Corp, you can compare the effects of market volatilities on Lumia and TNR 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 Lumia with a short position of TNR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and TNR Gold.
Diversification Opportunities for Lumia and TNR Gold
Very good diversification
The 3 months correlation between Lumia and TNR is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and TNR Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TNR Gold Corp and Lumia 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 Lumia are associated (or correlated) with TNR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TNR Gold Corp has no effect on the direction of Lumia i.e., Lumia and TNR Gold go up and down completely randomly.
Pair Corralation between Lumia and TNR Gold
Assuming the 90 days trading horizon Lumia is expected to under-perform the TNR Gold. In addition to that, Lumia is 1.05 times more volatile than TNR Gold Corp. It trades about -0.33 of its total potential returns per unit of risk. TNR Gold Corp is currently generating about 0.03 per unit of volatility. If you would invest 5.00 in TNR Gold Corp on November 2, 2024 and sell it today you would earn a total of 0.00 from holding TNR Gold Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumia vs. TNR Gold Corp
Performance |
| Timeline |
| Lumia |
| TNR Gold Corp |
Lumia and TNR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and TNR Gold
The main advantage of trading using opposite Lumia and TNR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, TNR 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 TNR Gold will offset losses from the drop in TNR Gold's long position.The idea behind Lumia and TNR Gold Corp 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.| TNR Gold vs. Goldcliff Resource Corp | TNR Gold vs. Plato Gold Corp | TNR Gold vs. VVC Exploration Corp | TNR Gold vs. CANEX Metals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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