Correlation Between Tudor Gold and Teuton Resources

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

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

Diversification Opportunities for Tudor Gold and Teuton Resources

0.86

Correlation Coefficient

Tudor Gold  Teuton Resources

Very poor diversification

The 3 months correlation between Tudor and Teuton is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tudor Gold Corp and Teuton Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teuton Resources Corp and Tudor 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 Tudor Gold Corp are associated (or correlated) with Teuton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teuton Resources Corp has no effect on the direction of Tudor Gold i.e., Tudor Gold and Teuton Resources go up and down completely randomly.

Pair Corralation between Tudor Gold and Teuton Resources

Assuming the 90 days horizon Tudor Gold is expected to generate 1.79 times less return on investment than Teuton Resources. In addition to that, Tudor Gold is 1.1 times more volatile than Teuton Resources Corp. It trades about 0.02 of its total potential returns per unit of risk. Teuton Resources Corp is currently generating about 0.04 per unit of volatility. If you would invest  105.00  in Teuton Resources Corp on September 3, 2024 and sell it today you would earn a total of  5.00  from holding Teuton Resources Corp or generate 4.76% return on investment over 90 days.

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

Tudor Gold Corp  vs.  Teuton Resources Corp

Tudor Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tudor Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tudor Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Teuton Resources Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teuton Resources Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Teuton Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tudor Gold and Teuton Resources

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

The idea behind Tudor Gold Corp and Teuton Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.