Correlation Between Talon Metals and Norden Crown

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

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

Diversification Opportunities for Talon Metals and Norden Crown

0.0

Correlation Coefficient

Talon Metals  Norden Crown

Pay attention - limited upside

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

Pair Corralation between Talon Metals and Norden Crown

Assuming the 90 days trading horizon Talon Metals Corp is expected to under-perform the Norden Crown. In addition to that, Talon Metals is 1.6 times more volatile than Norden Crown Metals. It trades about -0.04 of its total potential returns per unit of risk. Norden Crown Metals is currently generating about 0.03 per unit of volatility. If you would invest  5.00  in Norden Crown Metals on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Norden Crown Metals or generate 0.0% return on investment over 90 days.

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

Talon Metals Corp  vs.  Norden Crown Metals

Talon Metals Corp

Risk-Adjusted Performance

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Very Weak

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

Norden Crown Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norden Crown Metals 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 fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Talon Metals and Norden Crown

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

The idea behind Talon Metals Corp and Norden Crown Metals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.