Correlation Between Torq Resources and Lucara Diamond
Can any of the company-specific risk be diversified away by investing in both Torq Resources and Lucara Diamond 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 Torq Resources and Lucara Diamond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Torq Resources and Lucara Diamond Corp, you can compare the effects of market volatilities on Torq Resources and Lucara Diamond 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 Torq Resources with a short position of Lucara Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torq Resources and Lucara Diamond.
Diversification Opportunities for Torq Resources and Lucara Diamond
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Torq and Lucara is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Torq Resources and Lucara Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucara Diamond Corp and Torq 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 Torq Resources are associated (or correlated) with Lucara Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucara Diamond Corp has no effect on the direction of Torq Resources i.e., Torq Resources and Lucara Diamond go up and down completely randomly.
Pair Corralation between Torq Resources and Lucara Diamond
Assuming the 90 days trading horizon Torq Resources is expected to generate 2.56 times more return on investment than Lucara Diamond. However, Torq Resources is 2.56 times more volatile than Lucara Diamond Corp. It trades about 0.13 of its potential returns per unit of risk. Lucara Diamond Corp is currently generating about -0.19 per unit of risk. If you would invest 6.00 in Torq Resources on November 8, 2024 and sell it today you would earn a total of 1.50 from holding Torq Resources or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Torq Resources vs. Lucara Diamond Corp
Performance |
| Timeline |
| Torq Resources |
| Lucara Diamond Corp |
Torq Resources and Lucara Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Torq Resources and Lucara Diamond
The main advantage of trading using opposite Torq Resources and Lucara Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torq Resources position performs unexpectedly, Lucara Diamond 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 Lucara Diamond will offset losses from the drop in Lucara Diamond's long position.| Torq Resources vs. Wildsky Resources | Torq Resources vs. Themac Resources Group | Torq Resources vs. Golden Pursuit Resources | Torq Resources vs. Black Mammoth Metals |
| Lucara Diamond vs. Mountain Province Diamonds | Lucara Diamond vs. Lundin Gold | Lucara Diamond vs. North Arrow Minerals | Lucara Diamond vs. Osisko Gold Ro |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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