Correlation Between Sarama Resource and Thor Explorations
Can any of the company-specific risk be diversified away by investing in both Sarama Resource and Thor Explorations 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 Sarama Resource and Thor Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarama Resource and Thor Explorations, you can compare the effects of market volatilities on Sarama Resource and Thor Explorations 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 Sarama Resource with a short position of Thor Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarama Resource and Thor Explorations.
Diversification Opportunities for Sarama Resource and Thor Explorations
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sarama and Thor is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sarama Resource and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations and Sarama Resource 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 Sarama Resource are associated (or correlated) with Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Sarama Resource i.e., Sarama Resource and Thor Explorations go up and down completely randomly.
Pair Corralation between Sarama Resource and Thor Explorations
Assuming the 90 days horizon Sarama Resource is expected to generate 3.02 times more return on investment than Thor Explorations. However, Sarama Resource is 3.02 times more volatile than Thor Explorations. It trades about 0.08 of its potential returns per unit of risk. Thor Explorations is currently generating about 0.06 per unit of risk. If you would invest 1.50 in Sarama Resource on August 29, 2024 and sell it today you would earn a total of 1.50 from holding Sarama Resource or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarama Resource vs. Thor Explorations
Performance |
| Timeline |
| Sarama Resource |
| Thor Explorations |
Sarama Resource and Thor Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarama Resource and Thor Explorations
The main advantage of trading using opposite Sarama Resource and Thor Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarama Resource position performs unexpectedly, Thor Explorations 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 Thor Explorations will offset losses from the drop in Thor Explorations' long position.| Sarama Resource vs. Thor Explorations | Sarama Resource vs. Highway 50 Gold | Sarama Resource vs. Transatlantic Mining Corp | Sarama Resource vs. Finlay Minerals |
| Thor Explorations vs. First Majestic Silver | Thor Explorations vs. Ivanhoe Energy | Thor Explorations vs. Orezone Gold Corp | Thor Explorations vs. Faraday Copper 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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