Correlation Between Thunder Gold and Rumble

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

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

Diversification Opportunities for Thunder Gold and Rumble

-0.15

Correlation Coefficient

Thunder Gold  Rumble

Good diversification

The 3 months correlation between Thunder and Rumble is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Gold Corp and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc and Thunder 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 Thunder Gold Corp are associated (or correlated) with Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of Thunder Gold i.e., Thunder Gold and Rumble go up and down completely randomly.

Pair Corralation between Thunder Gold and Rumble

Assuming the 90 days horizon Thunder Gold Corp is expected to generate 3.59 times more return on investment than Rumble. However, Thunder Gold is 3.59 times more volatile than Rumble Inc. It trades about 0.09 of its potential returns per unit of risk. Rumble Inc is currently generating about 0.11 per unit of risk. If you would invest  2.82  in Thunder Gold Corp on August 31, 2024 and sell it today you would earn a total of  0.51  from holding Thunder Gold Corp or generate 18.09% return on investment over 90 days.

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

Thunder Gold Corp  vs.  Rumble Inc

Thunder Gold Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thunder Gold Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Thunder Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Rumble Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rumble displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thunder Gold and Rumble

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

The idea behind Thunder Gold Corp and Rumble Inc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.