Correlation Between Thor Mining and GoldMining

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

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

Diversification Opportunities for Thor Mining and GoldMining

-0.21

Correlation Coefficient

Thor Mining  GoldMining

Very good diversification

The 3 months correlation between Thor and GoldMining is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Thor Mining 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 Thor Mining PLC are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Thor Mining i.e., Thor Mining and GoldMining go up and down completely randomly.

Pair Corralation between Thor Mining and GoldMining

Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the GoldMining. In addition to that, Thor Mining is 1.22 times more volatile than GoldMining. It trades about -0.02 of its total potential returns per unit of risk. GoldMining is currently generating about -0.01 per unit of volatility. If you would invest  127.00  in GoldMining on September 1, 2024 and sell it today you would lose (7.00) from holding GoldMining or give up 5.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.16%
Values	Daily Returns

Thor Mining PLC  vs.  GoldMining

Thor Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thor Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

GoldMining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GoldMining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GoldMining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Thor Mining and GoldMining

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

The idea behind Thor Mining PLC and GoldMining 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.