Correlation Between American Creek and Tudor Gold

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

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

Diversification Opportunities for American Creek and Tudor Gold

0.15

Correlation Coefficient

American Creek  Tudor Gold

Average diversification

The 3 months correlation between American and Tudor is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources 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 American Creek 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 American Creek Resources 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 American Creek i.e., American Creek and Tudor Gold go up and down completely randomly.

Pair Corralation between American Creek and Tudor Gold

Assuming the 90 days horizon American Creek Resources is expected to under-perform the Tudor Gold. In addition to that, American Creek is 1.89 times more volatile than Tudor Gold Corp. It trades about -0.21 of its total potential returns per unit of risk. Tudor Gold Corp is currently generating about 0.0 per unit of volatility. If you would invest  66.00  in Tudor Gold Corp on December 29, 2024 and sell it today you would lose (3.00) from holding Tudor Gold Corp or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

American Creek Resources  vs.  Tudor Gold Corp

American Creek Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Creek Resources 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Tudor Gold Corp

Risk-Adjusted Performance

Very Weak

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

The main advantage of trading using opposite American Creek and Tudor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek 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 American Creek Resources 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.