Correlation Between Vista Gold and TMX Group
Can any of the company-specific risk be diversified away by investing in both Vista Gold and TMX Group 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 Vista Gold and TMX Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Gold and TMX Group Limited, you can compare the effects of market volatilities on Vista Gold and TMX Group 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 Vista Gold with a short position of TMX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Gold and TMX Group.
Diversification Opportunities for Vista Gold and TMX Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vista and TMX is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and TMX Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMX Group Limited and Vista 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 Vista Gold are associated (or correlated) with TMX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMX Group Limited has no effect on the direction of Vista Gold i.e., Vista Gold and TMX Group go up and down completely randomly.
Pair Corralation between Vista Gold and TMX Group
Assuming the 90 days trading horizon Vista Gold is expected to generate 4.85 times more return on investment than TMX Group. However, Vista Gold is 4.85 times more volatile than TMX Group Limited. It trades about 0.07 of its potential returns per unit of risk. TMX Group Limited is currently generating about 0.17 per unit of risk. If you would invest 48.00 in Vista Gold on September 4, 2024 and sell it today you would earn a total of 34.00 from holding Vista Gold or generate 70.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Gold vs. TMX Group Limited
Performance |
| Timeline |
| Vista Gold |
| TMX Group Limited |
Vista Gold and TMX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Gold and TMX Group
The main advantage of trading using opposite Vista Gold and TMX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Gold position performs unexpectedly, TMX Group 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 TMX Group will offset losses from the drop in TMX Group's long position.| Vista Gold vs. Trigon Metals | Vista Gold vs. RTG Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. Fremont Gold |
| TMX Group vs. Wishpond Technologies | TMX Group vs. Birchtech Corp | TMX Group vs. Doman Building Materials | TMX Group vs. Oculus VisionTech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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