Correlation Between Terreno Resources and Gamehost

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

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

Diversification Opportunities for Terreno Resources and Gamehost

0.19

Correlation Coefficient

Terreno Resources  Gamehost

Average diversification

The 3 months correlation between Terreno and Gamehost is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Resources Corp and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost and Terreno Resources 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 Terreno Resources Corp are associated (or correlated) with Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Terreno Resources i.e., Terreno Resources and Gamehost go up and down completely randomly.

Pair Corralation between Terreno Resources and Gamehost

Assuming the 90 days trading horizon Terreno Resources Corp is expected to generate 14.06 times more return on investment than Gamehost. However, Terreno Resources is 14.06 times more volatile than Gamehost. It trades about 0.07 of its potential returns per unit of risk. Gamehost is currently generating about -0.04 per unit of risk. If you would invest  1.00  in Terreno Resources Corp on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Terreno Resources Corp or generate 0.0% return on investment over 90 days.

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

Terreno Resources Corp  vs.  Gamehost

Terreno Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Terreno Resources Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Terreno Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Gamehost

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Terreno Resources and Gamehost

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

The idea behind Terreno Resources Corp and Gamehost 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.