Correlation Between TRU Precious and American Eagle
Can any of the company-specific risk be diversified away by investing in both TRU Precious and American Eagle 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 TRU Precious and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRU Precious Metals and American Eagle Gold, you can compare the effects of market volatilities on TRU Precious and American Eagle 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 TRU Precious with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRU Precious and American Eagle.
Diversification Opportunities for TRU Precious and American Eagle
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between TRU and American is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding TRU Precious Metals and American Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Gold and TRU Precious 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 TRU Precious Metals are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Gold has no effect on the direction of TRU Precious i.e., TRU Precious and American Eagle go up and down completely randomly.
Pair Corralation between TRU Precious and American Eagle
Assuming the 90 days horizon TRU Precious Metals is expected to generate 4.28 times more return on investment than American Eagle. However, TRU Precious is 4.28 times more volatile than American Eagle Gold. It trades about 0.11 of its potential returns per unit of risk. American Eagle Gold is currently generating about 0.15 per unit of risk. If you would invest 1.21 in TRU Precious Metals on November 27, 2024 and sell it today you would earn a total of 0.09 from holding TRU Precious Metals or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRU Precious Metals vs. American Eagle Gold
Performance |
| Timeline |
| TRU Precious Metals |
| American Eagle Gold |
TRU Precious and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRU Precious and American Eagle
The main advantage of trading using opposite TRU Precious and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRU Precious position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| TRU Precious vs. Lavras Gold Corp | TRU Precious vs. Orefinders Resources | TRU Precious vs. North Peak Resources | TRU Precious vs. Nine Mile Metals |
| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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