Correlation Between Terreno Resources and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Terreno Resources and Kinaxis 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 Terreno Resources and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Resources Corp and Kinaxis, you can compare the effects of market volatilities on Terreno Resources and Kinaxis 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 Terreno Resources with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Resources and Kinaxis.
Diversification Opportunities for Terreno Resources and Kinaxis
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Terreno and Kinaxis is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Resources Corp and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Terreno 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 Terreno Resources Corp are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Terreno Resources i.e., Terreno Resources and Kinaxis go up and down completely randomly.
Pair Corralation between Terreno Resources and Kinaxis
Assuming the 90 days trading horizon Terreno Resources Corp is expected to under-perform the Kinaxis. In addition to that, Terreno Resources is 4.9 times more volatile than Kinaxis. It trades about -0.21 of its total potential returns per unit of risk. Kinaxis is currently generating about 0.15 per unit of volatility. If you would invest 15,928 in Kinaxis on August 25, 2024 and sell it today you would earn a total of 1,131 from holding Kinaxis or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terreno Resources Corp vs. Kinaxis
Performance |
| Timeline |
| Terreno Resources Corp |
| Kinaxis |
Terreno Resources and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Resources and Kinaxis
The main advantage of trading using opposite Terreno Resources and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Resources position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' long position.| Terreno Resources vs. Queens Road Capital | Terreno Resources vs. Orbit Garant Drilling | Terreno Resources vs. Broadcom | Terreno Resources vs. Data Communications Management |
| Kinaxis vs. Forstrong Global Income | Kinaxis vs. Terreno Resources Corp | Kinaxis vs. iShares Canadian HYBrid | Kinaxis vs. Brompton European Dividend |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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