Correlation Between Thunder Mountain and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Thunder Mountain and Eastern Platinum 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 Eastern Platinum 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 Eastern Platinum Limited, you can compare the effects of market volatilities on Thunder Mountain and Eastern Platinum 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 Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Mountain and Eastern Platinum.
Diversification Opportunities for Thunder Mountain and Eastern Platinum
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thunder and Eastern is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Mountain Gold and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum 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 Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Thunder Mountain i.e., Thunder Mountain and Eastern Platinum go up and down completely randomly.
Pair Corralation between Thunder Mountain and Eastern Platinum
Given the investment horizon of 90 days Thunder Mountain Gold is expected to generate 1.54 times more return on investment than Eastern Platinum. However, Thunder Mountain is 1.54 times more volatile than Eastern Platinum Limited. It trades about 0.05 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.03 per unit of risk. If you would invest 8.20 in Thunder Mountain Gold on September 14, 2024 and sell it today you would earn a total of 1.80 from holding Thunder Mountain Gold or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thunder Mountain Gold vs. Eastern Platinum Limited
Performance |
| Timeline |
| Thunder Mountain Gold |
| Eastern Platinum |
Thunder Mountain and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Mountain and Eastern Platinum
The main advantage of trading using opposite Thunder Mountain and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Mountain position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| Thunder Mountain vs. American International Ventures | Thunder Mountain vs. USCorp | Thunder Mountain vs. Buscar Co |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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