Correlation Between Teuton Resources and Tudor Gold

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

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

Diversification Opportunities for Teuton Resources and Tudor Gold

0.56

Correlation Coefficient

Teuton Resources  Tudor Gold

Very weak diversification

The 3 months correlation between Teuton and Tudor is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Teuton Resources Corp and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor Gold Corp and Teuton 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 Teuton Resources Corp are associated (or correlated) with Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of Teuton Resources i.e., Teuton Resources and Tudor Gold go up and down completely randomly.

Pair Corralation between Teuton Resources and Tudor Gold

Assuming the 90 days horizon Teuton Resources Corp is expected to under-perform the Tudor Gold. But the stock apears to be less risky and, when comparing its historical volatility, Teuton Resources Corp is 1.06 times less risky than Tudor Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Tudor Gold Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Tudor Gold Corp on December 29, 2024 and sell it today you would lose (3.00) from holding Tudor Gold Corp or give up 4.55% of portfolio value over 90 days.

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

Teuton Resources Corp  vs.  Tudor Gold Corp

Teuton Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teuton Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Tudor Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Teuton Resources and Tudor Gold

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

The idea behind Teuton Resources Corp and Tudor 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.