Correlation Between Infinico Metals and Gold Terra

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

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

Diversification Opportunities for Infinico Metals and Gold Terra

-0.42

Correlation Coefficient

Infinico Metals  Gold Terra

Very good diversification

The 3 months correlation between Infinico and Gold is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Gold Terra Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Terra Resource and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Gold Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Terra Resource has no effect on the direction of Infinico Metals i.e., Infinico Metals and Gold Terra go up and down completely randomly.

Pair Corralation between Infinico Metals and Gold Terra

Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the Gold Terra. In addition to that, Infinico Metals is 1.78 times more volatile than Gold Terra Resource. It trades about -0.02 of its total potential returns per unit of risk. Gold Terra Resource is currently generating about -0.01 per unit of volatility. If you would invest  8.00  in Gold Terra Resource on September 3, 2024 and sell it today you would lose (2.00) from holding Gold Terra Resource or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Infinico Metals Corp  vs.  Gold Terra Resource

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gold Terra Resource

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Terra Resource are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gold Terra showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and Gold Terra

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

The idea behind Infinico Metals Corp and Gold Terra Resource 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.