Correlation Between Braveheart Resources and Thunder Mountain

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

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

Diversification Opportunities for Braveheart Resources and Thunder Mountain

-0.37

Correlation Coefficient

Braveheart Resources  Thunder Mountain

Very good diversification

The 3 months correlation between Braveheart and Thunder is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Braveheart Resources and Thunder Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Mountain Gold and Braveheart Resources 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 Braveheart Resources are associated (or correlated) with Thunder Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Mountain Gold has no effect on the direction of Braveheart Resources i.e., Braveheart Resources and Thunder Mountain go up and down completely randomly.

Pair Corralation between Braveheart Resources and Thunder Mountain

Assuming the 90 days horizon Braveheart Resources is expected to under-perform the Thunder Mountain. But the otc stock apears to be less risky and, when comparing its historical volatility, Braveheart Resources is 3.39 times less risky than Thunder Mountain. The otc stock trades about -0.04 of its potential returns per unit of risk. The Thunder Mountain Gold is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.80  in Thunder Mountain Gold on August 30, 2024 and sell it today you would earn a total of  2.94  from holding Thunder Mountain Gold or generate 77.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Braveheart Resources  vs.  Thunder Mountain Gold

Braveheart Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braveheart Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

Thunder Mountain Gold

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thunder Mountain Gold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, Thunder Mountain reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braveheart Resources and Thunder Mountain

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

The idea behind Braveheart Resources and Thunder Mountain Gold 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.