Correlation Between Thesis Gold and Dominion Lending

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

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

Diversification Opportunities for Thesis Gold and Dominion Lending

-0.89

Correlation Coefficient

Thesis Gold  Dominion Lending

Pay attention - limited upside

The 3 months correlation between Thesis and Dominion is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Thesis Gold and Dominion Lending Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Lending Centres and Thesis 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 Thesis Gold are associated (or correlated) with Dominion Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Lending Centres has no effect on the direction of Thesis Gold i.e., Thesis Gold and Dominion Lending go up and down completely randomly.

Pair Corralation between Thesis Gold and Dominion Lending

Assuming the 90 days horizon Thesis Gold is expected to under-perform the Dominion Lending. But the stock apears to be less risky and, when comparing its historical volatility, Thesis Gold is 1.01 times less risky than Dominion Lending. The stock trades about -0.19 of its potential returns per unit of risk. The Dominion Lending Centres is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  525.00  in Dominion Lending Centres on October 6, 2024 and sell it today you would earn a total of  275.00  from holding Dominion Lending Centres or generate 52.38% return on investment over 90 days.

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

Thesis Gold  vs.  Dominion Lending Centres

Thesis Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thesis Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Dominion Lending Centres

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dominion Lending Centres are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dominion Lending displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thesis Gold and Dominion Lending

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

The idea behind Thesis Gold and Dominion Lending Centres 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.

Check out your portfolio center.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.