Correlation Between TRU Precious and Treasury Metals
Can any of the company-specific risk be diversified away by investing in both TRU Precious and Treasury 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 TRU Precious and Treasury Metals 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 Treasury Metals, you can compare the effects of market volatilities on TRU Precious and Treasury 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 TRU Precious with a short position of Treasury Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRU Precious and Treasury Metals.
Diversification Opportunities for TRU Precious and Treasury Metals
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRU and Treasury is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TRU Precious Metals and Treasury Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Metals 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 Treasury Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Metals has no effect on the direction of TRU Precious i.e., TRU Precious and Treasury Metals go up and down completely randomly.
Pair Corralation between TRU Precious and Treasury Metals
Assuming the 90 days horizon TRU Precious Metals is expected to generate 5.0 times more return on investment than Treasury Metals. However, TRU Precious is 5.0 times more volatile than Treasury Metals. It trades about 0.06 of its potential returns per unit of risk. Treasury Metals is currently generating about 0.01 per unit of risk. If you would invest 4.47 in TRU Precious Metals on September 1, 2024 and sell it today you would lose (3.05) from holding TRU Precious Metals or give up 68.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.8% |
| Values | Daily Returns |
TRU Precious Metals vs. Treasury Metals
Performance |
| Timeline |
| TRU Precious Metals |
| Treasury Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TRU Precious and Treasury Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRU Precious and Treasury Metals
The main advantage of trading using opposite TRU Precious and Treasury Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRU Precious position performs unexpectedly, Treasury 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 Treasury Metals will offset losses from the drop in Treasury Metals' 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 |
| Treasury Metals vs. Nulegacy Gold | Treasury Metals vs. Labrador Gold Corp | Treasury Metals vs. Phenom Resources Corp | Treasury Metals vs. Rover Metals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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