Correlation Between Surge Copper and Tarku Resources

Can any of the company-specific risk be diversified away by investing in both Surge Copper and Tarku 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 Tarku 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 Tarku Resources, you can compare the effects of market volatilities on Surge Copper and Tarku 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 Tarku Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Copper and Tarku Resources.

Diversification Opportunities for Surge Copper and Tarku Resources

0.61

Correlation Coefficient

Surge Copper  Tarku Resources

Poor diversification

The 3 months correlation between Surge and Tarku is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and Tarku Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarku 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 Tarku Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarku Resources has no effect on the direction of Surge Copper i.e., Surge Copper and Tarku Resources go up and down completely randomly.

Pair Corralation between Surge Copper and Tarku Resources

Assuming the 90 days horizon Surge Copper Corp is expected to under-perform the Tarku Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Surge Copper Corp is 6.76 times less risky than Tarku Resources. The otc stock trades about -0.07 of its potential returns per unit of risk. The Tarku Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.04  in Tarku Resources on September 12, 2024 and sell it today you would lose (0.54) from holding Tarku Resources or give up 51.92% of portfolio value over 90 days.

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

Surge Copper Corp  vs.  Tarku Resources

Surge Copper Corp

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Tarku Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tarku Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tarku Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surge Copper and Tarku Resources

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

The idea behind Surge Copper Corp and Tarku 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.