Correlation Between Thunder Gold and Metals X
Can any of the company-specific risk be diversified away by investing in both Thunder Gold and Metals X 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 Thunder Gold and Metals X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunder Gold Corp and Metals X Limited, you can compare the effects of market volatilities on Thunder Gold and Metals X 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 Thunder Gold with a short position of Metals X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Gold and Metals X.
Diversification Opportunities for Thunder Gold and Metals X
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thunder and Metals is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Gold Corp and Metals X Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals X Limited and Thunder Gold 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 Thunder Gold Corp are associated (or correlated) with Metals X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals X Limited has no effect on the direction of Thunder Gold i.e., Thunder Gold and Metals X go up and down completely randomly.
Pair Corralation between Thunder Gold and Metals X
Assuming the 90 days horizon Thunder Gold Corp is expected to generate 3.48 times more return on investment than Metals X. However, Thunder Gold is 3.48 times more volatile than Metals X Limited. It trades about 0.16 of its potential returns per unit of risk. Metals X Limited is currently generating about -0.04 per unit of risk. If you would invest 2.40 in Thunder Gold Corp on September 13, 2024 and sell it today you would earn a total of 1.04 from holding Thunder Gold Corp or generate 43.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thunder Gold Corp vs. Metals X Limited
Performance |
| Timeline |
| Thunder Gold Corp |
| Metals X Limited |
Thunder Gold and Metals X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Gold and Metals X
The main advantage of trading using opposite Thunder Gold and Metals X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Gold position performs unexpectedly, Metals X 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 Metals X will offset losses from the drop in Metals X's long position.| Thunder Gold vs. Sea | Thunder Gold vs. Glacier Bancorp | Thunder Gold vs. SunLink Health Systems | Thunder Gold vs. Barings BDC |
| Metals X vs. Qubec Nickel Corp | Metals X vs. IGO Limited | Metals X vs. Focus Graphite | Metals X vs. Mineral Res |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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