Correlation Between Thunderbird Entertainment and CGX Energy

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

By analyzing existing cross correlation between Thunderbird Entertainment Group and CGX Energy, you can compare the effects of market volatilities on Thunderbird Entertainment and CGX Energy 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 Thunderbird Entertainment with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunderbird Entertainment and CGX Energy.

Diversification Opportunities for Thunderbird Entertainment and CGX Energy

0.31

Correlation Coefficient

Thunderbird Entertainment  CGX Energy

Weak diversification

The 3 months correlation between Thunderbird and CGX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Thunderbird Entertainment Grou and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Thunderbird Entertainment 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 Thunderbird Entertainment Group are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Thunderbird Entertainment i.e., Thunderbird Entertainment and CGX Energy go up and down completely randomly.

Pair Corralation between Thunderbird Entertainment and CGX Energy

Assuming the 90 days trading horizon Thunderbird Entertainment Group is expected to under-perform the CGX Energy. But the stock apears to be less risky and, when comparing its historical volatility, Thunderbird Entertainment Group is 3.04 times less risky than CGX Energy. The stock trades about -0.05 of its potential returns per unit of risk. The CGX Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  14.00  in CGX Energy on December 21, 2024 and sell it today you would earn a total of  0.00  from holding CGX Energy or generate 0.0% return on investment over 90 days.

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

Thunderbird Entertainment Grou  vs.  CGX Energy

Thunderbird Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

CGX Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CGX Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CGX Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thunderbird Entertainment and CGX Energy

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

The idea behind Thunderbird Entertainment Group and CGX Energy 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.