Correlation Between Triple Flag and Thunder Mountain
Can any of the company-specific risk be diversified away by investing in both Triple Flag 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 Triple Flag and Thunder Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and Thunder Mountain Gold, you can compare the effects of market volatilities on Triple Flag 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 Triple Flag with a short position of Thunder Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and Thunder Mountain.
Diversification Opportunities for Triple Flag and Thunder Mountain
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Triple and Thunder is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious 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 Triple Flag 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 Triple Flag Precious 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 Triple Flag i.e., Triple Flag and Thunder Mountain go up and down completely randomly.
Pair Corralation between Triple Flag and Thunder Mountain
Given the investment horizon of 90 days Triple Flag is expected to generate 8.57 times less return on investment than Thunder Mountain. But when comparing it to its historical volatility, Triple Flag Precious is 6.19 times less risky than Thunder Mountain. It trades about 0.05 of its potential returns per unit of risk. Thunder Mountain Gold is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Thunder Mountain Gold on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Thunder Mountain Gold or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Triple Flag Precious vs. Thunder Mountain Gold
Performance |
| Timeline |
| Triple Flag Precious |
| Thunder Mountain Gold |
Triple Flag and Thunder Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triple Flag and Thunder Mountain
The main advantage of trading using opposite Triple Flag and Thunder Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag 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.| Triple Flag vs. Metalla Royalty Streaming | Triple Flag vs. Endeavour Silver Corp | Triple Flag vs. SilverCrest Metals | Triple Flag vs. Gatos Silver |
| Thunder Mountain vs. Gold79 Mines | Thunder Mountain vs. Arctic Star Exploration | Thunder Mountain vs. Arras Minerals Corp | Thunder Mountain vs. American Creek Resources |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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