Correlation Between Lupaka Gold and Torex Gold

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

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

Diversification Opportunities for Lupaka Gold and Torex Gold

-0.52

Correlation Coefficient

Lupaka Gold  Torex Gold

Excellent diversification

The 3 months correlation between Lupaka and Torex is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lupaka Gold Corp and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources and Lupaka 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 Lupaka Gold Corp are associated (or correlated) with Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Lupaka Gold i.e., Lupaka Gold and Torex Gold go up and down completely randomly.

Pair Corralation between Lupaka Gold and Torex Gold

If you would invest  1,960  in Torex Gold Resources on October 27, 2024 and sell it today you would earn a total of  154.00  from holding Torex Gold Resources or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Lupaka Gold Corp  vs.  Torex Gold Resources

Lupaka Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lupaka Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Lupaka Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Torex Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Torex Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Torex Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lupaka Gold and Torex Gold

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

The idea behind Lupaka Gold Corp and Torex Gold 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.