Correlation Between Thor Mining and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Thor Mining and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Thor Mining and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Auction Technology.
Diversification Opportunities for Thor Mining and Auction Technology
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thor and Auction is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Thor Mining i.e., Thor Mining and Auction Technology go up and down completely randomly.
Pair Corralation between Thor Mining and Auction Technology
Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the Auction Technology. In addition to that, Thor Mining is 1.6 times more volatile than Auction Technology Group. It trades about -0.04 of its total potential returns per unit of risk. Auction Technology Group is currently generating about 0.3 per unit of volatility. If you would invest 54,300 in Auction Technology Group on October 28, 2024 and sell it today you would earn a total of 5,900 from holding Auction Technology Group or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. Auction Technology Group
Performance |
| Timeline |
| Thor Mining PLC |
| Auction Technology |
Thor Mining and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Auction Technology
The main advantage of trading using opposite Thor Mining and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya Mining |
| Auction Technology vs. Verizon Communications | Auction Technology vs. Edinburgh Investment Trust | Auction Technology vs. Ecofin Global Utilities | Auction Technology vs. Herald Investment Trust |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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