Correlation Between Tudor Gold and Steppe Gold
Can any of the company-specific risk be diversified away by investing in both Tudor Gold and Steppe Gold 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 Tudor Gold and Steppe Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tudor Gold Corp and Steppe Gold, you can compare the effects of market volatilities on Tudor Gold and Steppe Gold 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 Tudor Gold with a short position of Steppe Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tudor Gold and Steppe Gold.
Diversification Opportunities for Tudor Gold and Steppe Gold
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tudor and Steppe is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tudor Gold Corp and Steppe Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steppe Gold and Tudor 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 Tudor Gold Corp are associated (or correlated) with Steppe Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steppe Gold has no effect on the direction of Tudor Gold i.e., Tudor Gold and Steppe Gold go up and down completely randomly.
Pair Corralation between Tudor Gold and Steppe Gold
Assuming the 90 days horizon Tudor Gold Corp is expected to under-perform the Steppe Gold. But the stock apears to be less risky and, when comparing its historical volatility, Tudor Gold Corp is 1.3 times less risky than Steppe Gold. The stock trades about -0.28 of its potential returns per unit of risk. The Steppe Gold is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Steppe Gold on September 4, 2024 and sell it today you would lose (15.00) from holding Steppe Gold or give up 18.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tudor Gold Corp vs. Steppe Gold
Performance |
| Timeline |
| Tudor Gold Corp |
| Steppe Gold |
Tudor Gold and Steppe Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tudor Gold and Steppe Gold
The main advantage of trading using opposite Tudor Gold and Steppe Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tudor Gold position performs unexpectedly, Steppe Gold 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 Steppe Gold will offset losses from the drop in Steppe Gold's long position.| Tudor Gold vs. First Majestic Silver | Tudor Gold vs. Ivanhoe Energy | Tudor Gold vs. Orezone Gold Corp | Tudor Gold vs. Faraday Copper Corp |
| Steppe Gold vs. First Majestic Silver | Steppe Gold vs. Ivanhoe Energy | Steppe Gold vs. Orezone Gold Corp | Steppe Gold vs. Faraday Copper 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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