Correlation Between White Gold and Black Tusk

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

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

Diversification Opportunities for White Gold and Black Tusk

0.18

Correlation Coefficient

White Gold  Black Tusk

Average diversification

The 3 months correlation between White and Black is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding White Gold Corp and Black Tusk Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Tusk Resources and White 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 White Gold Corp are associated (or correlated) with Black Tusk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Tusk Resources has no effect on the direction of White Gold i.e., White Gold and Black Tusk go up and down completely randomly.

Pair Corralation between White Gold and Black Tusk

Assuming the 90 days horizon White Gold Corp is expected to under-perform the Black Tusk. But the otc stock apears to be less risky and, when comparing its historical volatility, White Gold Corp is 60.19 times less risky than Black Tusk. The otc stock trades about -0.04 of its potential returns per unit of risk. The Black Tusk Resources is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  0.77  in Black Tusk Resources on September 3, 2024 and sell it today you would earn a total of  6.23  from holding Black Tusk Resources or generate 809.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	34.38%
Values	Daily Returns

White Gold Corp  vs.  Black Tusk Resources

White Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days White Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Black Tusk Resources

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Black Tusk Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Black Tusk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with White Gold and Black Tusk

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

The idea behind White Gold Corp and Black Tusk 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.