Correlation Between Thomson Reuters and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both Thomson Reuters and Imperial Metals 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 Thomson Reuters and Imperial Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thomson Reuters Corp and Imperial Metals, you can compare the effects of market volatilities on Thomson Reuters and Imperial Metals 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 Thomson Reuters with a short position of Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thomson Reuters and Imperial Metals.
Diversification Opportunities for Thomson Reuters and Imperial Metals
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thomson and Imperial is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Thomson Reuters Corp and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals and Thomson Reuters 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 Thomson Reuters Corp are associated (or correlated) with Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of Thomson Reuters i.e., Thomson Reuters and Imperial Metals go up and down completely randomly.
Pair Corralation between Thomson Reuters and Imperial Metals
Assuming the 90 days trading horizon Thomson Reuters Corp is expected to generate 0.41 times more return on investment than Imperial Metals. However, Thomson Reuters Corp is 2.42 times less risky than Imperial Metals. It trades about 0.04 of its potential returns per unit of risk. Imperial Metals is currently generating about -0.01 per unit of risk. If you would invest 22,593 in Thomson Reuters Corp on September 21, 2024 and sell it today you would earn a total of 825.00 from holding Thomson Reuters Corp or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thomson Reuters Corp vs. Imperial Metals
Performance |
| Timeline |
| Thomson Reuters Corp |
| Imperial Metals |
Thomson Reuters and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thomson Reuters and Imperial Metals
The main advantage of trading using opposite Thomson Reuters and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thomson Reuters position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| Thomson Reuters vs. George Weston Limited | Thomson Reuters vs. Waste Connections | Thomson Reuters vs. Saputo Inc | Thomson Reuters vs. Toromont Industries |
| Imperial Metals vs. Arizona Sonoran Copper | Imperial Metals vs. World Copper | Imperial Metals vs. QC Copper and |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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