Correlation Between Tristar Gold and BonTerra Resources
Can any of the company-specific risk be diversified away by investing in both Tristar Gold and BonTerra Resources 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 Tristar Gold and BonTerra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tristar Gold and BonTerra Resources, you can compare the effects of market volatilities on Tristar Gold and BonTerra Resources 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 Tristar Gold with a short position of BonTerra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tristar Gold and BonTerra Resources.
Diversification Opportunities for Tristar Gold and BonTerra Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tristar and BonTerra is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tristar Gold and BonTerra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BonTerra Resources and Tristar Gold 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 Tristar Gold are associated (or correlated) with BonTerra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BonTerra Resources has no effect on the direction of Tristar Gold i.e., Tristar Gold and BonTerra Resources go up and down completely randomly.
Pair Corralation between Tristar Gold and BonTerra Resources
Assuming the 90 days horizon Tristar Gold is expected to generate 1.16 times less return on investment than BonTerra Resources. In addition to that, Tristar Gold is 1.18 times more volatile than BonTerra Resources. It trades about 0.02 of its total potential returns per unit of risk. BonTerra Resources is currently generating about 0.02 per unit of volatility. If you would invest 25.00 in BonTerra Resources on August 30, 2024 and sell it today you would earn a total of 0.00 from holding BonTerra Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tristar Gold vs. BonTerra Resources
Performance |
| Timeline |
| Tristar Gold |
| BonTerra Resources |
Tristar Gold and BonTerra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tristar Gold and BonTerra Resources
The main advantage of trading using opposite Tristar Gold and BonTerra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tristar Gold position performs unexpectedly, BonTerra Resources 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 BonTerra Resources will offset losses from the drop in BonTerra Resources' long position.| Tristar Gold vs. First Majestic Silver | Tristar Gold vs. Ivanhoe Energy | Tristar Gold vs. Orezone Gold Corp | Tristar Gold vs. Faraday Copper Corp |
| BonTerra Resources vs. Cartier Resources | BonTerra Resources vs. Galway Metals | BonTerra Resources vs. Aurion Resources | BonTerra Resources vs. Minaurum 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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