Correlation Between Timberline Resources and International Tower
Can any of the company-specific risk be diversified away by investing in both Timberline Resources and International Tower 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 Timberline Resources and International Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timberline Resources and International Tower Hill, you can compare the effects of market volatilities on Timberline Resources and International Tower 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 Timberline Resources with a short position of International Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timberline Resources and International Tower.
Diversification Opportunities for Timberline Resources and International Tower
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Timberline and International is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Timberline Resources and International Tower Hill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Tower Hill and Timberline Resources 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 Timberline Resources are associated (or correlated) with International Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Tower Hill has no effect on the direction of Timberline Resources i.e., Timberline Resources and International Tower go up and down completely randomly.
Pair Corralation between Timberline Resources and International Tower
Given the investment horizon of 90 days Timberline Resources is expected to under-perform the International Tower. In addition to that, Timberline Resources is 1.77 times more volatile than International Tower Hill. It trades about -0.02 of its total potential returns per unit of risk. International Tower Hill is currently generating about 0.02 per unit of volatility. If you would invest 45.00 in International Tower Hill on September 1, 2024 and sell it today you would earn a total of 1.00 from holding International Tower Hill or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Timberline Resources vs. International Tower Hill
Performance |
| Timeline |
| Timberline Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Tower Hill |
Timberline Resources and International Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timberline Resources and International Tower
The main advantage of trading using opposite Timberline Resources and International Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timberline Resources position performs unexpectedly, International Tower 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 International Tower will offset losses from the drop in International Tower's long position.| Timberline Resources vs. Sokoman Minerals Corp | Timberline Resources vs. Irving Resources | Timberline Resources vs. Lion One Metals | Timberline Resources vs. Exploits Discovery Corp |
| International Tower vs. Vista Gold | International Tower vs. Golden Minerals | International Tower vs. Paramount Gold Nevada | International Tower vs. Tanzanian Royalty Exploration |
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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