Correlation Between Torex Gold and Lupaka Gold

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

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

Diversification Opportunities for Torex Gold and Lupaka Gold

-0.52

Correlation Coefficient

Torex Gold  Lupaka Gold

Excellent diversification

The 3 months correlation between Torex and Lupaka is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Torex Gold Resources and Lupaka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupaka Gold Corp and Torex Gold 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 Torex Gold Resources are associated (or correlated) with Lupaka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupaka Gold Corp has no effect on the direction of Torex Gold i.e., Torex Gold and Lupaka Gold go up and down completely randomly.

Pair Corralation between Torex Gold and Lupaka Gold

If you would invest  1,960  in Torex Gold Resources on October 27, 2024 and sell it today you would earn a total of  154.00  from holding Torex Gold Resources or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Torex Gold Resources  vs.  Lupaka Gold Corp

Torex Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Torex Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Torex Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lupaka Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lupaka Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Lupaka Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Torex Gold and Lupaka Gold

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

The idea behind Torex Gold Resources and Lupaka Gold 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.