Correlation Between Trainline Plc and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Trainline Plc and Thor Mining 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 Trainline Plc and Thor Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainline Plc and Thor Mining PLC, you can compare the effects of market volatilities on Trainline Plc and Thor Mining 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 Trainline Plc with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainline Plc and Thor Mining.
Diversification Opportunities for Trainline Plc and Thor Mining
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trainline and Thor is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Trainline Plc and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and Trainline Plc 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 Trainline Plc are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Trainline Plc i.e., Trainline Plc and Thor Mining go up and down completely randomly.
Pair Corralation between Trainline Plc and Thor Mining
Assuming the 90 days trading horizon Trainline Plc is expected to under-perform the Thor Mining. In addition to that, Trainline Plc is 1.22 times more volatile than Thor Mining PLC. It trades about -0.19 of its total potential returns per unit of risk. Thor Mining PLC is currently generating about -0.04 per unit of volatility. If you would invest 70.00 in Thor Mining PLC on October 28, 2024 and sell it today you would lose (2.00) from holding Thor Mining PLC or give up 2.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Trainline Plc vs. Thor Mining PLC
Performance |
Timeline |
Trainline Plc |
Thor Mining PLC |
Trainline Plc and Thor Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trainline Plc and Thor Mining
The main advantage of trading using opposite Trainline Plc and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.Trainline Plc vs. mobilezone holding AG | Trainline Plc vs. Seche Environnement SA | Trainline Plc vs. Symphony Environmental Technologies | Trainline Plc vs. Mobile Tornado Group |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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