Correlation Between Thunder Mountain and Clifton Mining
Can any of the company-specific risk be diversified away by investing in both Thunder Mountain and Clifton Mining 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 Mountain and Clifton Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunder Mountain Gold and Clifton Mining Co, you can compare the effects of market volatilities on Thunder Mountain and Clifton Mining 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 Mountain with a short position of Clifton Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Mountain and Clifton Mining.
Diversification Opportunities for Thunder Mountain and Clifton Mining
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thunder and Clifton is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Mountain Gold and Clifton Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clifton Mining and Thunder Mountain 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 Mountain Gold are associated (or correlated) with Clifton Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clifton Mining has no effect on the direction of Thunder Mountain i.e., Thunder Mountain and Clifton Mining go up and down completely randomly.
Pair Corralation between Thunder Mountain and Clifton Mining
Given the investment horizon of 90 days Thunder Mountain Gold is expected to generate 1.42 times more return on investment than Clifton Mining. However, Thunder Mountain is 1.42 times more volatile than Clifton Mining Co. It trades about 0.12 of its potential returns per unit of risk. Clifton Mining Co is currently generating about 0.03 per unit of risk. If you would invest 4.10 in Thunder Mountain Gold on November 3, 2024 and sell it today you would earn a total of 5.90 from holding Thunder Mountain Gold or generate 143.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thunder Mountain Gold vs. Clifton Mining Co
Performance |
| Timeline |
| Thunder Mountain Gold |
| Clifton Mining |
Thunder Mountain and Clifton Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Mountain and Clifton Mining
The main advantage of trading using opposite Thunder Mountain and Clifton Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Mountain position performs unexpectedly, Clifton Mining 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 Clifton Mining will offset losses from the drop in Clifton Mining's long position.| Thunder Mountain vs. American International Ventures | Thunder Mountain vs. USCorp | Thunder Mountain vs. Buscar Co |
| Clifton Mining vs. Cartier Iron Corp | Clifton Mining vs. Arctic Star Exploration | Clifton Mining vs. Capella Minerals Limited | Clifton Mining vs. Denarius Silver 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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