Correlation Between Thesis Gold and Trican Well

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

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

Diversification Opportunities for Thesis Gold and Trican Well

-0.63

Correlation Coefficient

Thesis Gold  Trican Well

Excellent diversification

The 3 months correlation between Thesis and Trican is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thesis Gold and Trican Well Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trican Well Service 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 Trican Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trican Well Service has no effect on the direction of Thesis Gold i.e., Thesis Gold and Trican Well go up and down completely randomly.

Pair Corralation between Thesis Gold and Trican Well

Assuming the 90 days horizon Thesis Gold is expected to generate 4.61 times more return on investment than Trican Well. However, Thesis Gold is 4.61 times more volatile than Trican Well Service. It trades about 0.02 of its potential returns per unit of risk. Trican Well Service is currently generating about 0.05 per unit of risk. If you would invest  95.00  in Thesis Gold on October 5, 2024 and sell it today you would lose (36.00) from holding Thesis Gold or give up 37.89% of portfolio value over 90 days.

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

Thesis Gold  vs.  Trican Well Service

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.

Trican Well Service

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trican Well Service are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Trican Well may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Thesis Gold and Trican Well

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

The idea behind Thesis Gold and Trican Well Service 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.