Correlation Between Thunderstruck Resources and Independence Gold

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

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

Diversification Opportunities for Thunderstruck Resources and Independence Gold

0.14

Correlation Coefficient

Thunderstruck Resources  Independence Gold

Average diversification

The 3 months correlation between Thunderstruck and Independence is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thunderstruck Resources and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Gold Corp and Thunderstruck Resources 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 Thunderstruck Resources are associated (or correlated) with Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of Thunderstruck Resources i.e., Thunderstruck Resources and Independence Gold go up and down completely randomly.

Pair Corralation between Thunderstruck Resources and Independence Gold

Assuming the 90 days horizon Thunderstruck Resources is expected to generate 1.56 times more return on investment than Independence Gold. However, Thunderstruck Resources is 1.56 times more volatile than Independence Gold Corp. It trades about 0.01 of its potential returns per unit of risk. Independence Gold Corp is currently generating about -0.01 per unit of risk. If you would invest  5.00  in Thunderstruck Resources on September 29, 2024 and sell it today you would lose (0.50) from holding Thunderstruck Resources or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Thunderstruck Resources  vs.  Independence Gold Corp

Thunderstruck Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thunderstruck Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thunderstruck Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Independence Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Independence Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Independence Gold 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 Thunderstruck Resources and Independence Gold

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

The idea behind Thunderstruck Resources and Independence 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.