Correlation Between Thor Mining and ITM Power
Can any of the company-specific risk be diversified away by investing in both Thor Mining and ITM Power 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 ITM Power 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 ITM Power, you can compare the effects of market volatilities on Thor Mining and ITM Power 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 ITM Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and ITM Power.
Diversification Opportunities for Thor Mining and ITM Power
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thor and ITM is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and ITM Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Power 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 ITM Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Power has no effect on the direction of Thor Mining i.e., Thor Mining and ITM Power go up and down completely randomly.
Pair Corralation between Thor Mining and ITM Power
Assuming the 90 days trading horizon Thor Mining PLC is expected to generate 0.88 times more return on investment than ITM Power. However, Thor Mining PLC is 1.14 times less risky than ITM Power. It trades about 0.05 of its potential returns per unit of risk. ITM Power is currently generating about 0.03 per unit of risk. If you would invest 70.00 in Thor Mining PLC on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Thor Mining PLC or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. ITM Power
Performance |
| Timeline |
| Thor Mining PLC |
| ITM Power |
Thor Mining and ITM Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and ITM Power
The main advantage of trading using opposite Thor Mining and ITM Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, ITM Power 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 ITM Power will offset losses from the drop in ITM Power's long position.| Thor Mining vs. Bankers Investment Trust | Thor Mining vs. United Airlines Holdings | Thor Mining vs. Bank of Ireland | Thor Mining vs. Regions Financial Corp |
| ITM Power vs. Samsung Electronics Co | ITM Power vs. Vietnam Enterprise Investments | ITM Power vs. STMicroelectronics NV | ITM Power vs. BlackRock Frontiers Investment |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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