Correlation Between Thor Explorations and Cabral Gold
Can any of the company-specific risk be diversified away by investing in both Thor Explorations and Cabral Gold 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 Explorations and Cabral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Explorations and Cabral Gold, you can compare the effects of market volatilities on Thor Explorations and Cabral Gold 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 Explorations with a short position of Cabral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Explorations and Cabral Gold.
Diversification Opportunities for Thor Explorations and Cabral Gold
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thor and Cabral is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thor Explorations and Cabral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabral Gold and Thor Explorations 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 Explorations are associated (or correlated) with Cabral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabral Gold has no effect on the direction of Thor Explorations i.e., Thor Explorations and Cabral Gold go up and down completely randomly.
Pair Corralation between Thor Explorations and Cabral Gold
Assuming the 90 days horizon Thor Explorations is expected to generate 1.05 times more return on investment than Cabral Gold. However, Thor Explorations is 1.05 times more volatile than Cabral Gold. It trades about 0.07 of its potential returns per unit of risk. Cabral Gold is currently generating about -0.02 per unit of risk. If you would invest 21.00 in Thor Explorations on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Thor Explorations or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Explorations vs. Cabral Gold
Performance |
| Timeline |
| Thor Explorations |
| Cabral Gold |
Thor Explorations and Cabral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Explorations and Cabral Gold
The main advantage of trading using opposite Thor Explorations and Cabral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Explorations position performs unexpectedly, Cabral Gold 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 Cabral Gold will offset losses from the drop in Cabral Gold's long position.| Thor Explorations vs. Aurion Resources | Thor Explorations vs. Liberty Gold Corp | Thor Explorations vs. Orezone Gold Corp | Thor Explorations vs. Radisson Mining Resources |
| Cabral Gold vs. Aurion Resources | Cabral Gold vs. Liberty Gold Corp | Cabral Gold vs. Orezone Gold Corp | Cabral Gold vs. Radisson Mining Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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