Correlation Between TerraCom and Hallador Energy
Can any of the company-specific risk be diversified away by investing in both TerraCom and Hallador Energy 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 TerraCom and Hallador Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TerraCom Limited and Hallador Energy, you can compare the effects of market volatilities on TerraCom and Hallador Energy 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 TerraCom with a short position of Hallador Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TerraCom and Hallador Energy.
Diversification Opportunities for TerraCom and Hallador Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TerraCom and Hallador is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding TerraCom Limited and Hallador Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hallador Energy and TerraCom 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 TerraCom Limited are associated (or correlated) with Hallador Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hallador Energy has no effect on the direction of TerraCom i.e., TerraCom and Hallador Energy go up and down completely randomly.
Pair Corralation between TerraCom and Hallador Energy
Assuming the 90 days horizon TerraCom Limited is expected to under-perform the Hallador Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, TerraCom Limited is 1.07 times less risky than Hallador Energy. The pink sheet trades about -0.69 of its potential returns per unit of risk. The Hallador Energy is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,213 in Hallador Energy on November 9, 2024 and sell it today you would lose (138.00) from holding Hallador Energy or give up 11.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.0% |
| Values | Daily Returns |
TerraCom Limited vs. Hallador Energy
Performance |
| Timeline |
| TerraCom Limited |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Hallador Energy |
TerraCom and Hallador Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TerraCom and Hallador Energy
The main advantage of trading using opposite TerraCom and Hallador Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TerraCom position performs unexpectedly, Hallador Energy 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 Hallador Energy will offset losses from the drop in Hallador Energy's long position.| TerraCom vs. Indo Tambangraya Megah | TerraCom vs. Adaro Energy Tbk | TerraCom vs. Thungela Resources Limited | TerraCom vs. China Coal Energy |
| Hallador Energy vs. Natural Resource Partners | Hallador Energy vs. Adaro Energy Tbk | Hallador Energy vs. Alliance Resource Partners | Hallador Energy vs. NACCO Industries |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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