Correlation Between TRU Precious and Puma Exploration
Can any of the company-specific risk be diversified away by investing in both TRU Precious and Puma Exploration 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 Puma Exploration 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 Puma Exploration, you can compare the effects of market volatilities on TRU Precious and Puma Exploration 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 Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRU Precious and Puma Exploration.
Diversification Opportunities for TRU Precious and Puma Exploration
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRU and Puma is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TRU Precious Metals and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration 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 Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of TRU Precious i.e., TRU Precious and Puma Exploration go up and down completely randomly.
Pair Corralation between TRU Precious and Puma Exploration
Assuming the 90 days horizon TRU Precious Metals is expected to generate 1.51 times more return on investment than Puma Exploration. However, TRU Precious is 1.51 times more volatile than Puma Exploration. It trades about 0.25 of its potential returns per unit of risk. Puma Exploration is currently generating about 0.09 per unit of risk. If you would invest 1.02 in TRU Precious Metals on November 5, 2024 and sell it today you would earn a total of 0.70 from holding TRU Precious Metals or generate 68.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
TRU Precious Metals vs. Puma Exploration
Performance |
| Timeline |
| TRU Precious Metals |
| Puma Exploration |
TRU Precious and Puma Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRU Precious and Puma Exploration
The main advantage of trading using opposite TRU Precious and Puma Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRU Precious position performs unexpectedly, Puma Exploration 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 Puma Exploration will offset losses from the drop in Puma Exploration'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 |
| Puma Exploration vs. Newcore Gold | Puma Exploration vs. Cerrado Gold | Puma Exploration vs. Palamina Corp | Puma Exploration vs. Gold Springs Resource |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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