Correlation Between Thor Mining and Alternative Liquidity
Can any of the company-specific risk be diversified away by investing in both Thor Mining and Alternative Liquidity 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 Alternative Liquidity 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 Alternative Liquidity, you can compare the effects of market volatilities on Thor Mining and Alternative Liquidity 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 Alternative Liquidity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Alternative Liquidity.
Diversification Opportunities for Thor Mining and Alternative Liquidity
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thor and Alternative is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Alternative Liquidity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Liquidity 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 Alternative Liquidity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Liquidity has no effect on the direction of Thor Mining i.e., Thor Mining and Alternative Liquidity go up and down completely randomly.
Pair Corralation between Thor Mining and Alternative Liquidity
Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the Alternative Liquidity. In addition to that, Thor Mining is 3.44 times more volatile than Alternative Liquidity. It trades about -0.13 of its total potential returns per unit of risk. Alternative Liquidity is currently generating about -0.21 per unit of volatility. If you would invest 4.00 in Alternative Liquidity on September 13, 2024 and sell it today you would lose (0.25) from holding Alternative Liquidity or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. Alternative Liquidity
Performance |
| Timeline |
| Thor Mining PLC |
| Alternative Liquidity |
Thor Mining and Alternative Liquidity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Alternative Liquidity
The main advantage of trading using opposite Thor Mining and Alternative Liquidity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, Alternative Liquidity 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 Alternative Liquidity will offset losses from the drop in Alternative Liquidity's long position.| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya Mining |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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