Correlation Between Tudor Gold and Advance Gold

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

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

Diversification Opportunities for Tudor Gold and Advance Gold

-0.17

Correlation Coefficient

Tudor Gold  Advance Gold

Good diversification

The 3 months correlation between Tudor and Advance is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Tudor Gold Corp and Advance Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Gold Corp and Tudor 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 Tudor Gold Corp are associated (or correlated) with Advance Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Gold Corp has no effect on the direction of Tudor Gold i.e., Tudor Gold and Advance Gold go up and down completely randomly.

Pair Corralation between Tudor Gold and Advance Gold

Assuming the 90 days horizon Tudor Gold Corp is expected to under-perform the Advance Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tudor Gold Corp is 4.72 times less risky than Advance Gold. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Advance Gold Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.69  in Advance Gold Corp on October 10, 2024 and sell it today you would earn a total of  1.51  from holding Advance Gold Corp or generate 218.84% return on investment over 90 days.

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

Tudor Gold Corp  vs.  Advance Gold Corp

Tudor Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Advance Gold Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advance Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Advance Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tudor Gold and Advance Gold

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

The idea behind Tudor Gold Corp and Advance 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.