Correlation Between Thor Explorations and First

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

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

Diversification Opportunities for Thor Explorations and First

0.78

Correlation Coefficient

Thor Explorations  First

Poor diversification

The 3 months correlation between Thor and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Thor Explorations and First Class Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Class Metals and Thor Explorations 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 Thor Explorations are associated (or correlated) with First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Class Metals has no effect on the direction of Thor Explorations i.e., Thor Explorations and First go up and down completely randomly.

Pair Corralation between Thor Explorations and First

Assuming the 90 days trading horizon Thor Explorations is expected to generate 6.88 times less return on investment than First. But when comparing it to its historical volatility, Thor Explorations is 4.26 times less risky than First. It trades about 0.1 of its potential returns per unit of risk. First Class Metals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  93.00  in First Class Metals on April 21, 2025 and sell it today you would earn a total of  117.00  from holding First Class Metals or generate 125.81% return on investment over 90 days.

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

Thor Explorations  vs.  First Class Metals

Thor Explorations

Risk-Adjusted Performance

OK

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

First Class Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Class Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, First exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thor Explorations and First

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

The idea behind Thor Explorations and First Class Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.