Correlation Between Centerra Gold and Tudor Gold

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

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

Diversification Opportunities for Centerra Gold and Tudor Gold

0.85

Correlation Coefficient

Centerra Gold  Tudor Gold

Very poor diversification

The 3 months correlation between Centerra and Tudor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Centerra Gold and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor Gold Corp and Centerra 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 Centerra Gold are associated (or correlated) with Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of Centerra Gold i.e., Centerra Gold and Tudor Gold go up and down completely randomly.

Pair Corralation between Centerra Gold and Tudor Gold

Given the investment horizon of 90 days Centerra Gold is expected to generate 0.57 times more return on investment than Tudor Gold. However, Centerra Gold is 1.76 times less risky than Tudor Gold. It trades about -0.08 of its potential returns per unit of risk. Tudor Gold Corp is currently generating about -0.1 per unit of risk. If you would invest  692.00  in Centerra Gold on September 12, 2024 and sell it today you would lose (92.00) from holding Centerra Gold or give up 13.29% of portfolio value over 90 days.

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

Centerra Gold  vs.  Tudor Gold Corp

Centerra Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centerra Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Tudor Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Centerra Gold and Tudor Gold

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

The idea behind Centerra Gold and Tudor 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.