Correlation Between Outcrop Gold and Terreno Resources
Can any of the company-specific risk be diversified away by investing in both Outcrop Gold and Terreno 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 Outcrop Gold and Terreno Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outcrop Gold Corp and Terreno Resources Corp, you can compare the effects of market volatilities on Outcrop Gold and Terreno 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 Outcrop Gold with a short position of Terreno Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outcrop Gold and Terreno Resources.
Diversification Opportunities for Outcrop Gold and Terreno Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Outcrop and Terreno is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold Corp and Terreno Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Resources Corp and Outcrop Gold 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 Outcrop Gold Corp are associated (or correlated) with Terreno Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Resources Corp has no effect on the direction of Outcrop Gold i.e., Outcrop Gold and Terreno Resources go up and down completely randomly.
Pair Corralation between Outcrop Gold and Terreno Resources
Assuming the 90 days horizon Outcrop Gold is expected to generate 6.6 times less return on investment than Terreno Resources. But when comparing it to its historical volatility, Outcrop Gold Corp is 3.35 times less risky than Terreno Resources. It trades about 0.03 of its potential returns per unit of risk. Terreno Resources Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Terreno Resources Corp on September 14, 2024 and sell it today you would lose (1.00) from holding Terreno Resources Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outcrop Gold Corp vs. Terreno Resources Corp
Performance |
| Timeline |
| Outcrop Gold Corp |
| Terreno Resources Corp |
Outcrop Gold and Terreno Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outcrop Gold and Terreno Resources
The main advantage of trading using opposite Outcrop Gold and Terreno Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outcrop Gold position performs unexpectedly, Terreno 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 Terreno Resources will offset losses from the drop in Terreno Resources' long position.| Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Kootenay Silver | Outcrop Gold vs. Kore Mining | Outcrop Gold vs. Blackrock Silver Corp |
| Terreno Resources vs. Outcrop Gold Corp | Terreno Resources vs. Strikepoint Gold | Terreno Resources vs. Defiance Silver Corp | Terreno Resources vs. Eskay 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |