Correlation Between TRON and Bathurst Metals

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

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

Diversification Opportunities for TRON and Bathurst Metals

0.44

Correlation Coefficient

TRON  Bathurst Metals

Very weak diversification

The 3 months correlation between TRON and Bathurst is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Bathurst Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bathurst Metals Corp and TRON 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 TRON are associated (or correlated) with Bathurst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bathurst Metals Corp has no effect on the direction of TRON i.e., TRON and Bathurst Metals go up and down completely randomly.

Pair Corralation between TRON and Bathurst Metals

If you would invest  4.36  in Bathurst Metals Corp on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Bathurst Metals Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

TRON  vs.  Bathurst Metals Corp

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bathurst Metals Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bathurst Metals Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bathurst Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TRON and Bathurst Metals

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

The idea behind TRON and Bathurst Metals 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.