Correlation Between Thor Mining and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Thor Mining and Southern Copper 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 Southern Copper 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 Southern Copper Corp, you can compare the effects of market volatilities on Thor Mining and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Southern Copper.
Diversification Opportunities for Thor Mining and Southern Copper
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thor and Southern is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Thor Mining i.e., Thor Mining and Southern Copper go up and down completely randomly.
Pair Corralation between Thor Mining and Southern Copper
Assuming the 90 days trading horizon Thor Mining PLC is expected to generate 2.41 times more return on investment than Southern Copper. However, Thor Mining is 2.41 times more volatile than Southern Copper Corp. It trades about -0.04 of its potential returns per unit of risk. Southern Copper Corp is currently generating about -0.22 per unit of risk. If you would invest 80.00 in Thor Mining PLC on September 22, 2024 and sell it today you would lose (10.00) from holding Thor Mining PLC or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. Southern Copper Corp
Performance |
| Timeline |
| Thor Mining PLC |
| Southern Copper Corp |
Thor Mining and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Southern Copper
The main advantage of trading using opposite Thor Mining and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya Mining |
| Southern Copper vs. Primary Health Properties | Southern Copper vs. Inspiration Healthcare Group | Southern Copper vs. Griffin Mining | Southern Copper vs. Spire Healthcare Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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