Correlation Between Apple and Thunder Gold

Can any of the company-specific risk be diversified away by investing in both Apple and Thunder 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 Apple and Thunder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Thunder Gold Corp, you can compare the effects of market volatilities on Apple and Thunder 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 Apple with a short position of Thunder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Thunder Gold.

Diversification Opportunities for Apple and Thunder Gold

0.27

Correlation Coefficient

Apple  Thunder Gold

Modest diversification

The 3 months correlation between Apple and Thunder is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Thunder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Gold Corp and Apple 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 Apple Inc are associated (or correlated) with Thunder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Gold Corp has no effect on the direction of Apple i.e., Apple and Thunder Gold go up and down completely randomly.

Pair Corralation between Apple and Thunder Gold

Given the investment horizon of 90 days Apple is expected to generate 13.86 times less return on investment than Thunder Gold. But when comparing it to its historical volatility, Apple Inc is 17.54 times less risky than Thunder Gold. It trades about 0.12 of its potential returns per unit of risk. Thunder Gold Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2.58  in Thunder Gold Corp on September 3, 2024 and sell it today you would earn a total of  0.67  from holding Thunder Gold Corp or generate 25.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Apple Inc  vs.  Thunder Gold Corp

Apple Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Thunder Gold Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thunder Gold Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Thunder Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Thunder Gold

The main advantage of trading using opposite Apple and Thunder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Thunder 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 Thunder Gold will offset losses from the drop in Thunder Gold's long position.

The idea behind Apple Inc and Thunder Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.