Correlation Between Thunder Mountain and Sabre Gold
Can any of the company-specific risk be diversified away by investing in both Thunder Mountain and Sabre Gold 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 Sabre Gold 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 Sabre Gold Mines, you can compare the effects of market volatilities on Thunder Mountain and Sabre Gold 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 Sabre Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Mountain and Sabre Gold.
Diversification Opportunities for Thunder Mountain and Sabre Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thunder and Sabre is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Mountain Gold and Sabre Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Gold Mines 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 Sabre Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Gold Mines has no effect on the direction of Thunder Mountain i.e., Thunder Mountain and Sabre Gold go up and down completely randomly.
Pair Corralation between Thunder Mountain and Sabre Gold
Given the investment horizon of 90 days Thunder Mountain Gold is expected to generate 3.26 times more return on investment than Sabre Gold. However, Thunder Mountain is 3.26 times more volatile than Sabre Gold Mines. It trades about 0.27 of its potential returns per unit of risk. Sabre Gold Mines is currently generating about -0.05 per unit of risk. If you would invest 4.20 in Thunder Mountain Gold on September 13, 2024 and sell it today you would earn a total of 3.81 from holding Thunder Mountain Gold or generate 90.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thunder Mountain Gold vs. Sabre Gold Mines
Performance |
| Timeline |
| Thunder Mountain Gold |
| Sabre Gold Mines |
Thunder Mountain and Sabre Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Mountain and Sabre Gold
The main advantage of trading using opposite Thunder Mountain and Sabre Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Mountain position performs unexpectedly, Sabre Gold 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 Sabre Gold will offset losses from the drop in Sabre Gold's long position.| Thunder Mountain vs. American International Ventures | Thunder Mountain vs. USCorp | Thunder Mountain vs. Buscar Co |
| Sabre Gold vs. Thunder Mountain Gold | Sabre Gold vs. Romios Gold Resources | Sabre Gold vs. Kootenay Silver | Sabre Gold vs. Grande Portage 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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