Correlation Between Thesis Gold and Pinetree Capital

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

By analyzing existing cross correlation between Thesis Gold and Pinetree Capital, you can compare the effects of market volatilities on Thesis Gold and Pinetree Capital 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 Pinetree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thesis Gold and Pinetree Capital.

Diversification Opportunities for Thesis Gold and Pinetree Capital

-0.82

Correlation Coefficient

Thesis Gold  Pinetree Capital

Pay attention - limited upside

The 3 months correlation between Thesis and Pinetree is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Thesis Gold and Pinetree Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinetree Capital 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 Pinetree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinetree Capital has no effect on the direction of Thesis Gold i.e., Thesis Gold and Pinetree Capital go up and down completely randomly.

Pair Corralation between Thesis Gold and Pinetree Capital

Assuming the 90 days horizon Thesis Gold is expected to under-perform the Pinetree Capital. But the stock apears to be less risky and, when comparing its historical volatility, Thesis Gold is 1.54 times less risky than Pinetree Capital. The stock trades about -0.23 of its potential returns per unit of risk. The Pinetree Capital is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Pinetree Capital on October 9, 2024 and sell it today you would earn a total of  14.00  from holding Pinetree Capital or generate 1.24% 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.  Pinetree Capital

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.

Pinetree Capital

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pinetree Capital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Pinetree Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thesis Gold and Pinetree Capital

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

The idea behind Thesis Gold and Pinetree Capital 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.