Correlation Between TeraGo and Wallbridge Mining

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

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

Diversification Opportunities for TeraGo and Wallbridge Mining

0.8

Correlation Coefficient

TeraGo  Wallbridge Mining

Very poor diversification

The 3 months correlation between TeraGo and Wallbridge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TeraGo Inc and Wallbridge Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbridge Mining and TeraGo 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 TeraGo Inc are associated (or correlated) with Wallbridge Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbridge Mining has no effect on the direction of TeraGo i.e., TeraGo and Wallbridge Mining go up and down completely randomly.

Pair Corralation between TeraGo and Wallbridge Mining

Assuming the 90 days trading horizon TeraGo Inc is expected to generate 0.83 times more return on investment than Wallbridge Mining. However, TeraGo Inc is 1.21 times less risky than Wallbridge Mining. It trades about 0.0 of its potential returns per unit of risk. Wallbridge Mining is currently generating about 0.0 per unit of risk. If you would invest  262.00  in TeraGo Inc on October 4, 2024 and sell it today you would lose (141.00) from holding TeraGo Inc or give up 53.82% of portfolio value over 90 days.

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

TeraGo Inc  vs.  Wallbridge Mining

TeraGo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TeraGo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Wallbridge Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wallbridge Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Wallbridge Mining is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TeraGo and Wallbridge Mining

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

The idea behind TeraGo Inc and Wallbridge Mining 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..