Correlation Between Avrupa Minerals and Thunderstruck Resources

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

By analyzing existing cross correlation between Avrupa Minerals and Thunderstruck Resources, you can compare the effects of market volatilities on Avrupa Minerals and Thunderstruck 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 Avrupa Minerals with a short position of Thunderstruck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avrupa Minerals and Thunderstruck Resources.

Diversification Opportunities for Avrupa Minerals and Thunderstruck Resources

-0.22

Correlation Coefficient

Avrupa Minerals  Thunderstruck Resources

Very good diversification

The 3 months correlation between Avrupa and Thunderstruck is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Avrupa Minerals and Thunderstruck Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderstruck Resources and Avrupa Minerals 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 Avrupa Minerals are associated (or correlated) with Thunderstruck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderstruck Resources has no effect on the direction of Avrupa Minerals i.e., Avrupa Minerals and Thunderstruck Resources go up and down completely randomly.

Pair Corralation between Avrupa Minerals and Thunderstruck Resources

Assuming the 90 days horizon Avrupa Minerals is expected to generate 1.28 times more return on investment than Thunderstruck Resources. However, Avrupa Minerals is 1.28 times more volatile than Thunderstruck Resources. It trades about 0.07 of its potential returns per unit of risk. Thunderstruck Resources is currently generating about 0.0 per unit of risk. If you would invest  3.00  in Avrupa Minerals on September 3, 2024 and sell it today you would earn a total of  0.50  from holding Avrupa Minerals or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Avrupa Minerals  vs.  Thunderstruck Resources

Avrupa Minerals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avrupa Minerals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Avrupa Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Thunderstruck Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunderstruck Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Thunderstruck Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Avrupa Minerals and Thunderstruck Resources

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

The idea behind Avrupa Minerals and Thunderstruck Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.