Correlation Between Talon Metals and Puma Exploration
Can any of the company-specific risk be diversified away by investing in both Talon Metals and Puma Exploration 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 Talon Metals and Puma Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talon Metals Corp and Puma Exploration, you can compare the effects of market volatilities on Talon Metals and Puma Exploration 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 Talon Metals with a short position of Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talon Metals and Puma Exploration.
Diversification Opportunities for Talon Metals and Puma Exploration
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Talon and Puma is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Talon Metals Corp and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration and Talon Metals 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 Talon Metals Corp are associated (or correlated) with Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of Talon Metals i.e., Talon Metals and Puma Exploration go up and down completely randomly.
Pair Corralation between Talon Metals and Puma Exploration
Assuming the 90 days horizon Talon Metals Corp is expected to under-perform the Puma Exploration. But the pink sheet apears to be less risky and, when comparing its historical volatility, Talon Metals Corp is 1.54 times less risky than Puma Exploration. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Puma Exploration is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Puma Exploration on September 23, 2024 and sell it today you would lose (4.00) from holding Puma Exploration or give up 44.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talon Metals Corp vs. Puma Exploration
Performance |
| Timeline |
| Talon Metals Corp |
| Puma Exploration |
Talon Metals and Puma Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talon Metals and Puma Exploration
The main advantage of trading using opposite Talon Metals and Puma Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talon Metals position performs unexpectedly, Puma Exploration 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 Puma Exploration will offset losses from the drop in Puma Exploration's long position.| Talon Metals vs. Puma Exploration | Talon Metals vs. Sixty North Gold | Talon Metals vs. Red Pine Exploration | Talon Metals vs. Grande Portage Resources |
| Puma Exploration vs. Sixty North Gold | Puma Exploration vs. Red Pine Exploration | Puma Exploration vs. Grande Portage Resources | Puma Exploration vs. Altamira Gold Corp |
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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