Correlation Between Thor Mining and Premier African
Can any of the company-specific risk be diversified away by investing in both Thor Mining and Premier African 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 Premier African 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 Premier African Minerals, you can compare the effects of market volatilities on Thor Mining and Premier African 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 Premier African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Premier African.
Diversification Opportunities for Thor Mining and Premier African
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thor and Premier is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Premier African Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier African Minerals 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 Premier African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier African Minerals has no effect on the direction of Thor Mining i.e., Thor Mining and Premier African go up and down completely randomly.
Pair Corralation between Thor Mining and Premier African
Assuming the 90 days trading horizon Thor Mining PLC is expected to generate 0.56 times more return on investment than Premier African. However, Thor Mining PLC is 1.77 times less risky than Premier African. It trades about -0.05 of its potential returns per unit of risk. Premier African Minerals is currently generating about -0.04 per unit of risk. If you would invest 350.00 in Thor Mining PLC on November 7, 2024 and sell it today you would lose (287.00) from holding Thor Mining PLC or give up 82.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. Premier African Minerals
Performance |
| Timeline |
| Thor Mining PLC |
| Premier African Minerals |
Thor Mining and Premier African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Premier African
The main advantage of trading using opposite Thor Mining and Premier African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, Premier African 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 Premier African will offset losses from the drop in Premier African's long position.| Thor Mining vs. Fonix Mobile plc | Thor Mining vs. Batm Advanced Communications | Thor Mining vs. Naturhouse Health SA | Thor Mining vs. Primary Health Properties |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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