Correlation Between Thor Mining and Enbridge
Can any of the company-specific risk be diversified away by investing in both Thor Mining and Enbridge 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 Thor Mining and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Mining PLC and Enbridge, you can compare the effects of market volatilities on Thor Mining and Enbridge 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 Thor Mining with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Enbridge.
Diversification Opportunities for Thor Mining and Enbridge
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thor and Enbridge is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Thor Mining 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 Thor Mining PLC are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Thor Mining i.e., Thor Mining and Enbridge go up and down completely randomly.
Pair Corralation between Thor Mining and Enbridge
Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the Enbridge. In addition to that, Thor Mining is 3.43 times more volatile than Enbridge. It trades about -0.05 of its total potential returns per unit of risk. Enbridge is currently generating about 0.09 per unit of volatility. If you would invest 4,698 in Enbridge on October 25, 2024 and sell it today you would earn a total of 1,750 from holding Enbridge or generate 37.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 54.42% |
| Values | Daily Returns |
Thor Mining PLC vs. Enbridge
Performance |
| Timeline |
| Thor Mining PLC |
| Enbridge |
Thor Mining and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Enbridge
The main advantage of trading using opposite Thor Mining and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Thor Mining vs. Monster Beverage Corp | Thor Mining vs. Tyson Foods Cl | Thor Mining vs. InterContinental Hotels Group | Thor Mining vs. Young Cos Brewery |
| Enbridge vs. Empire Metals Limited | Enbridge vs. Polar Capital Technology | Enbridge vs. Playtech Plc | Enbridge vs. Thor Mining PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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