Correlation Between Cabral Gold and Thor Explorations

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

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

Diversification Opportunities for Cabral Gold and Thor Explorations

0.08

Correlation Coefficient

Cabral Gold  Thor Explorations

Significant diversification

The 3 months correlation between Cabral and Thor is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations and Cabral 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 Cabral Gold are associated (or correlated) with Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Cabral Gold i.e., Cabral Gold and Thor Explorations go up and down completely randomly.

Pair Corralation between Cabral Gold and Thor Explorations

Assuming the 90 days horizon Cabral Gold is expected to under-perform the Thor Explorations. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cabral Gold is 1.03 times less risky than Thor Explorations. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Thor Explorations is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Thor Explorations on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Thor Explorations or generate 5.0% return on investment over 90 days.

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

Cabral Gold  vs.  Thor Explorations

Cabral Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cabral Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Thor Explorations

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Explorations are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Thor Explorations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cabral Gold and Thor Explorations

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

The idea behind Cabral Gold and Thor Explorations 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.