Correlation Between Tombador Iron and Talga Resources

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

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

Diversification Opportunities for Tombador Iron and Talga Resources

0.0

Correlation Coefficient

Tombador Iron  Talga Resources

Pay attention - limited upside

The 3 months correlation between Tombador and Talga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tombador Iron and Talga Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talga Resources and Tombador Iron 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 Tombador Iron are associated (or correlated) with Talga Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talga Resources has no effect on the direction of Tombador Iron i.e., Tombador Iron and Talga Resources go up and down completely randomly.

Pair Corralation between Tombador Iron and Talga Resources

If you would invest  38.00  in Talga Resources on October 10, 2024 and sell it today you would earn a total of  4.00  from holding Talga Resources or generate 10.53% return on investment over 90 days.

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

Tombador Iron  vs.  Talga Resources

Tombador Iron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tombador Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tombador Iron is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Talga Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Talga Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Talga Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tombador Iron and Talga Resources

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

The idea behind Tombador Iron and Talga Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.