Correlation Between Surge Copper and Thunderstruck Resources

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

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

Diversification Opportunities for Surge Copper and Thunderstruck Resources

-0.53

Correlation Coefficient

Surge Copper  Thunderstruck Resources

Excellent diversification

The 3 months correlation between Surge and Thunderstruck is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and Thunderstruck Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderstruck Resources and Surge Copper 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 Surge Copper Corp are associated (or correlated) with Thunderstruck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderstruck Resources has no effect on the direction of Surge Copper i.e., Surge Copper and Thunderstruck Resources go up and down completely randomly.

Pair Corralation between Surge Copper and Thunderstruck Resources

Assuming the 90 days horizon Surge Copper Corp is expected to generate 2.17 times more return on investment than Thunderstruck Resources. However, Surge Copper is 2.17 times more volatile than Thunderstruck Resources. It trades about -0.05 of its potential returns per unit of risk. Thunderstruck Resources is currently generating about -0.24 per unit of risk. If you would invest  6.49  in Surge Copper Corp on December 3, 2024 and sell it today you would lose (0.49) from holding Surge Copper Corp or give up 7.55% of portfolio value over 90 days.

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

Surge Copper Corp  vs.  Thunderstruck Resources

Surge Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Surge Copper Corp 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.

Thunderstruck Resources

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Surge Copper and Thunderstruck Resources

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

The idea behind Surge Copper Corp and Thunderstruck 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.