Correlation Between Outback Goldfields and TinOne Resources

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

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

Diversification Opportunities for Outback Goldfields and TinOne Resources

0.42

Correlation Coefficient

Outback Goldfields  TinOne Resources

Very weak diversification

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

Pair Corralation between Outback Goldfields and TinOne Resources

Given the investment horizon of 90 days Outback Goldfields Corp is expected to under-perform the TinOne Resources. But the stock apears to be less risky and, when comparing its historical volatility, Outback Goldfields Corp is 1.75 times less risky than TinOne Resources. The stock trades about -0.08 of its potential returns per unit of risk. The TinOne Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8.50  in TinOne Resources on October 11, 2024 and sell it today you would earn a total of  2.50  from holding TinOne Resources or generate 29.41% return on investment over 90 days.

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

Outback Goldfields Corp  vs.  TinOne Resources

Outback Goldfields Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Outback Goldfields Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

TinOne Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TinOne Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TinOne Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outback Goldfields and TinOne Resources

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

The idea behind Outback Goldfields Corp and TinOne 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 Commodity Directory module to find actively traded commodities issued by global exchanges.