Correlation Between Provenance Gold and Thunder Mountain
Can any of the company-specific risk be diversified away by investing in both Provenance Gold and Thunder Mountain 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 Provenance Gold and Thunder Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provenance Gold Corp and Thunder Mountain Gold, you can compare the effects of market volatilities on Provenance Gold and Thunder Mountain 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 Provenance Gold with a short position of Thunder Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provenance Gold and Thunder Mountain.
Diversification Opportunities for Provenance Gold and Thunder Mountain
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Provenance and Thunder is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Provenance Gold Corp and Thunder Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Mountain Gold and Provenance 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 Provenance Gold Corp are associated (or correlated) with Thunder Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Mountain Gold has no effect on the direction of Provenance Gold i.e., Provenance Gold and Thunder Mountain go up and down completely randomly.
Pair Corralation between Provenance Gold and Thunder Mountain
Assuming the 90 days horizon Provenance Gold is expected to generate 1.04 times less return on investment than Thunder Mountain. But when comparing it to its historical volatility, Provenance Gold Corp is 1.56 times less risky than Thunder Mountain. It trades about 0.18 of its potential returns per unit of risk. Thunder Mountain Gold is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4.10 in Thunder Mountain Gold on November 3, 2024 and sell it today you would earn a total of 5.90 from holding Thunder Mountain Gold or generate 143.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Provenance Gold Corp vs. Thunder Mountain Gold
Performance |
| Timeline |
| Provenance Gold Corp |
| Thunder Mountain Gold |
Provenance Gold and Thunder Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provenance Gold and Thunder Mountain
The main advantage of trading using opposite Provenance Gold and Thunder Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provenance Gold position performs unexpectedly, Thunder Mountain 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 Thunder Mountain will offset losses from the drop in Thunder Mountain's long position.| Provenance Gold vs. Chesapeake Gold Corp | Provenance Gold vs. Clifton Mining Co | Provenance Gold vs. Usha Resources | Provenance Gold vs. American Copper Development |
| Thunder Mountain vs. American International Ventures | Thunder Mountain vs. USCorp | Thunder Mountain vs. Buscar Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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