Correlation Between Thesis Gold and Tudor Gold

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

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

Diversification Opportunities for Thesis Gold and Tudor Gold

0.06

Correlation Coefficient

Thesis Gold  Tudor Gold

Significant diversification

The 3 months correlation between Thesis and Tudor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thesis Gold and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor Gold Corp 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 Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of Thesis Gold i.e., Thesis Gold and Tudor Gold go up and down completely randomly.

Pair Corralation between Thesis Gold and Tudor Gold

Assuming the 90 days horizon Thesis Gold is expected to generate 1.25 times more return on investment than Tudor Gold. However, Thesis Gold is 1.25 times more volatile than Tudor Gold Corp. It trades about 0.19 of its potential returns per unit of risk. Tudor Gold Corp is currently generating about 0.0 per unit of risk. If you would invest  56.00  in Thesis Gold on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Thesis Gold or generate 58.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Thesis Gold  vs.  Tudor Gold Corp

Thesis Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thesis Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thesis Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Tudor Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tudor Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Thesis Gold and Tudor Gold

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

The idea behind Thesis Gold and Tudor Gold Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.