Correlation Between TRU Precious and Grande Portage
Can any of the company-specific risk be diversified away by investing in both TRU Precious and Grande Portage 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 Grande Portage 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 Grande Portage Resources, you can compare the effects of market volatilities on TRU Precious and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRU Precious and Grande Portage.
Diversification Opportunities for TRU Precious and Grande Portage
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRU and Grande is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding TRU Precious Metals and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage Resources 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 Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of TRU Precious i.e., TRU Precious and Grande Portage go up and down completely randomly.
Pair Corralation between TRU Precious and Grande Portage
Assuming the 90 days horizon TRU Precious Metals is expected to generate 4.85 times more return on investment than Grande Portage. However, TRU Precious is 4.85 times more volatile than Grande Portage Resources. It trades about 0.07 of its potential returns per unit of risk. Grande Portage Resources is currently generating about 0.02 per unit of risk. If you would invest 1.33 in TRU Precious Metals on September 1, 2024 and sell it today you would earn a total of 0.09 from holding TRU Precious Metals or generate 6.77% 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. Grande Portage Resources
Performance |
| Timeline |
| TRU Precious Metals |
| Grande Portage Resources |
TRU Precious and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRU Precious and Grande Portage
The main advantage of trading using opposite TRU Precious and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRU Precious position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage'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 |
| Grande Portage vs. Puma Exploration | Grande Portage vs. Sixty North Gold | Grande Portage vs. Red Pine Exploration | Grande Portage vs. Altamira Gold Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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