Correlation Between Teuton Resources and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Teuton Resources and GoGold 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 Teuton Resources and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teuton Resources Corp and GoGold Resources, you can compare the effects of market volatilities on Teuton Resources and GoGold 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 Teuton Resources with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teuton Resources and GoGold Resources.
Diversification Opportunities for Teuton Resources and GoGold Resources
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Teuton and GoGold is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Teuton Resources Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Teuton 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 Teuton Resources Corp are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Teuton Resources i.e., Teuton Resources and GoGold Resources go up and down completely randomly.
Pair Corralation between Teuton Resources and GoGold Resources
Assuming the 90 days horizon Teuton Resources Corp is expected to under-perform the GoGold Resources. But the stock apears to be less risky and, when comparing its historical volatility, Teuton Resources Corp is 1.35 times less risky than GoGold Resources. The stock trades about -0.2 of its potential returns per unit of risk. The GoGold Resources is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 136.00 in GoGold Resources on September 25, 2024 and sell it today you would lose (24.00) from holding GoGold Resources or give up 17.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Teuton Resources Corp vs. GoGold Resources
Performance |
Timeline |
Teuton Resources Corp |
GoGold Resources |
Teuton Resources and GoGold Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teuton Resources and GoGold Resources
The main advantage of trading using opposite Teuton Resources and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teuton Resources position performs unexpectedly, GoGold 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.Teuton Resources vs. Precipitate Gold Corp | Teuton Resources vs. Libero Copper Corp | Teuton Resources vs. Chakana Copper Corp | Teuton Resources vs. ROKMASTER Resources Corp |
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Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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