Correlation Between Tesoro Minerals and Stellar AfricaGold
Can any of the company-specific risk be diversified away by investing in both Tesoro Minerals and Stellar AfricaGold 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 Tesoro Minerals and Stellar AfricaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesoro Minerals Corp and Stellar AfricaGold, you can compare the effects of market volatilities on Tesoro Minerals and Stellar AfricaGold 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 Tesoro Minerals with a short position of Stellar AfricaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesoro Minerals and Stellar AfricaGold.
Diversification Opportunities for Tesoro Minerals and Stellar AfricaGold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tesoro and Stellar is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tesoro Minerals Corp and Stellar AfricaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellar AfricaGold and Tesoro Minerals 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 Tesoro Minerals Corp are associated (or correlated) with Stellar AfricaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellar AfricaGold has no effect on the direction of Tesoro Minerals i.e., Tesoro Minerals and Stellar AfricaGold go up and down completely randomly.
Pair Corralation between Tesoro Minerals and Stellar AfricaGold
Assuming the 90 days horizon Tesoro Minerals Corp is expected to generate 0.9 times more return on investment than Stellar AfricaGold. However, Tesoro Minerals Corp is 1.11 times less risky than Stellar AfricaGold. It trades about 0.07 of its potential returns per unit of risk. Stellar AfricaGold is currently generating about 0.04 per unit of risk. If you would invest 2.00 in Tesoro Minerals Corp on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Tesoro Minerals Corp or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesoro Minerals Corp vs. Stellar AfricaGold
Performance |
| Timeline |
| Tesoro Minerals Corp |
| Stellar AfricaGold |
Tesoro Minerals and Stellar AfricaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesoro Minerals and Stellar AfricaGold
The main advantage of trading using opposite Tesoro Minerals and Stellar AfricaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesoro Minerals position performs unexpectedly, Stellar AfricaGold 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 Stellar AfricaGold will offset losses from the drop in Stellar AfricaGold's long position.| Tesoro Minerals vs. First Majestic Silver | Tesoro Minerals vs. Ivanhoe Energy | Tesoro Minerals vs. Orezone Gold Corp | Tesoro Minerals vs. Faraday Copper Corp |
| Stellar AfricaGold vs. Richmond Minerals | Stellar AfricaGold vs. Societe d Exploration | Stellar AfricaGold vs. Tesoro Minerals 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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