Correlation Between Themac Resources and Wallbridge Mining
Can any of the company-specific risk be diversified away by investing in both Themac Resources and Wallbridge 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 Themac Resources and Wallbridge Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themac Resources Group and Wallbridge Mining, you can compare the effects of market volatilities on Themac Resources and Wallbridge 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 Themac Resources with a short position of Wallbridge Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themac Resources and Wallbridge Mining.
Diversification Opportunities for Themac Resources and Wallbridge Mining
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Themac and Wallbridge is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Themac Resources Group and Wallbridge Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbridge Mining and Themac 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 Themac Resources Group are associated (or correlated) with Wallbridge Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbridge Mining has no effect on the direction of Themac Resources i.e., Themac Resources and Wallbridge Mining go up and down completely randomly.
Pair Corralation between Themac Resources and Wallbridge Mining
Assuming the 90 days horizon Themac Resources Group is expected to under-perform the Wallbridge Mining. In addition to that, Themac Resources is 1.79 times more volatile than Wallbridge Mining. It trades about -0.21 of its total potential returns per unit of risk. Wallbridge Mining is currently generating about -0.15 per unit of volatility. If you would invest 5.00 in Wallbridge Mining on September 12, 2024 and sell it today you would lose (0.78) from holding Wallbridge Mining or give up 15.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Themac Resources Group vs. Wallbridge Mining
Performance |
| Timeline |
| Themac Resources |
| Wallbridge Mining |
Themac Resources and Wallbridge Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Themac Resources and Wallbridge Mining
The main advantage of trading using opposite Themac Resources and Wallbridge Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themac Resources position performs unexpectedly, Wallbridge 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 Wallbridge Mining will offset losses from the drop in Wallbridge Mining's long position.| Themac Resources vs. Commander Resources | Themac Resources vs. East Africa Metals | Themac Resources vs. Forsys Metals Corp | Themac Resources vs. American CuMo Mining |
| Wallbridge Mining vs. Group Ten Metals | Wallbridge Mining vs. Ascendant Resources | Wallbridge Mining vs. Atico Mining | Wallbridge Mining vs. Prime Mining 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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