Correlation Between T2 Metals and Bald Eagle
Can any of the company-specific risk be diversified away by investing in both T2 Metals and Bald Eagle 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 T2 Metals and Bald Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T2 Metals Corp and Bald Eagle Gold, you can compare the effects of market volatilities on T2 Metals and Bald Eagle 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 T2 Metals with a short position of Bald Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of T2 Metals and Bald Eagle.
Diversification Opportunities for T2 Metals and Bald Eagle
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between TWO and Bald is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding T2 Metals Corp and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle Gold and T2 Metals 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 T2 Metals Corp are associated (or correlated) with Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of T2 Metals i.e., T2 Metals and Bald Eagle go up and down completely randomly.
Pair Corralation between T2 Metals and Bald Eagle
Assuming the 90 days horizon T2 Metals Corp is expected to under-perform the Bald Eagle. But the stock apears to be less risky and, when comparing its historical volatility, T2 Metals Corp is 1.08 times less risky than Bald Eagle. The stock trades about -0.29 of its potential returns per unit of risk. The Bald Eagle Gold is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Bald Eagle Gold on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Bald Eagle Gold or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T2 Metals Corp vs. Bald Eagle Gold
Performance |
| Timeline |
| T2 Metals Corp |
| Bald Eagle Gold |
T2 Metals and Bald Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T2 Metals and Bald Eagle
The main advantage of trading using opposite T2 Metals and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T2 Metals position performs unexpectedly, Bald Eagle 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 Bald Eagle will offset losses from the drop in Bald Eagle's long position.| T2 Metals vs. First Majestic Silver | T2 Metals vs. Ivanhoe Energy | T2 Metals vs. Orezone Gold Corp | T2 Metals vs. Faraday Copper Corp |
| Bald Eagle vs. Quorum Information Technologies | Bald Eagle vs. Algonquin Power Utilities | Bald Eagle vs. Datable Technology Corp | Bald Eagle vs. Rogers Communications |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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