Correlation Between SolGold PLC and Tudor Gold
Can any of the company-specific risk be diversified away by investing in both SolGold PLC and Tudor 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 SolGold PLC and Tudor Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolGold PLC and Tudor Gold Corp, you can compare the effects of market volatilities on SolGold PLC and Tudor 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 SolGold PLC with a short position of Tudor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolGold PLC and Tudor Gold.
Diversification Opportunities for SolGold PLC and Tudor Gold
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SolGold and Tudor is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SolGold PLC and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor Gold Corp and SolGold PLC 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 SolGold PLC are associated (or correlated) with Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of SolGold PLC i.e., SolGold PLC and Tudor Gold go up and down completely randomly.
Pair Corralation between SolGold PLC and Tudor Gold
Assuming the 90 days trading horizon SolGold PLC is expected to generate 0.59 times more return on investment than Tudor Gold. However, SolGold PLC is 1.69 times less risky than Tudor Gold. It trades about -0.32 of its potential returns per unit of risk. Tudor Gold Corp is currently generating about -0.28 per unit of risk. If you would invest 16.00 in SolGold PLC on September 3, 2024 and sell it today you would lose (2.00) from holding SolGold PLC or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolGold PLC vs. Tudor Gold Corp
Performance |
| Timeline |
| SolGold PLC |
| Tudor Gold Corp |
SolGold PLC and Tudor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolGold PLC and Tudor Gold
The main advantage of trading using opposite SolGold PLC and Tudor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolGold PLC position performs unexpectedly, Tudor 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 Tudor Gold will offset losses from the drop in Tudor Gold's long position.| SolGold PLC vs. Lundin Gold | SolGold PLC vs. Trilogy Metals | SolGold PLC vs. Solaris Resources | SolGold PLC vs. Tudor Gold Corp |
| Tudor Gold vs. Teuton Resources Corp | Tudor Gold vs. American Creek Resources | Tudor Gold vs. Freegold Ventures Limited | Tudor Gold vs. Dolly Varden Silver |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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