Correlation Between Tristar Gold and Thunderstruck Resources

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

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

Diversification Opportunities for Tristar Gold and Thunderstruck Resources

-0.54

Correlation Coefficient

Tristar Gold  Thunderstruck Resources

Excellent diversification

The 3 months correlation between Tristar and Thunderstruck is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tristar Gold and Thunderstruck Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderstruck Resources and Tristar 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 Tristar Gold 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 Tristar Gold i.e., Tristar Gold and Thunderstruck Resources go up and down completely randomly.

Pair Corralation between Tristar Gold and Thunderstruck Resources

Assuming the 90 days horizon Tristar Gold is expected to under-perform the Thunderstruck Resources. In addition to that, Tristar Gold is 1.22 times more volatile than Thunderstruck Resources. It trades about -0.03 of its total potential returns per unit of risk. Thunderstruck Resources is currently generating about 0.01 per unit of volatility. 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tristar Gold  vs.  Thunderstruck Resources

Tristar Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tristar Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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.

Pair Trading with Tristar Gold and Thunderstruck Resources

The main advantage of trading using opposite Tristar Gold and Thunderstruck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tristar Gold 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 Tristar Gold 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.