Correlation Between TinOne Resources and Outback Goldfields

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

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

Diversification Opportunities for TinOne Resources and Outback Goldfields

0.29

Correlation Coefficient

TinOne Resources  Outback Goldfields

Modest diversification

The 3 months correlation between TinOne and Outback is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding TinOne Resources and Outback Goldfields Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outback Goldfields Corp and TinOne 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 TinOne Resources are associated (or correlated) with Outback Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outback Goldfields Corp has no effect on the direction of TinOne Resources i.e., TinOne Resources and Outback Goldfields go up and down completely randomly.

Pair Corralation between TinOne Resources and Outback Goldfields

Assuming the 90 days trading horizon TinOne Resources is expected to generate 2.44 times more return on investment than Outback Goldfields. However, TinOne Resources is 2.44 times more volatile than Outback Goldfields Corp. It trades about 0.25 of its potential returns per unit of risk. Outback Goldfields Corp is currently generating about 0.03 per unit of risk. If you would invest  7.50  in TinOne Resources on October 26, 2024 and sell it today you would earn a total of  5.50  from holding TinOne Resources or generate 73.33% return on investment over 90 days.

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

TinOne Resources  vs.  Outback Goldfields Corp

TinOne Resources

Risk-Adjusted Performance

5 of 100

Modest

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

Outback Goldfields Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Outback Goldfields Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Outback Goldfields may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TinOne Resources and Outback Goldfields

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

The idea behind TinOne Resources and Outback Goldfields Corp 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.

Check out your portfolio center.

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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .