Correlation Between TeraGo and Bitterroot Resources

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

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

Diversification Opportunities for TeraGo and Bitterroot Resources

0.0

Correlation Coefficient

TeraGo  Bitterroot Resources

Pay attention - limited upside

The 3 months correlation between TeraGo and Bitterroot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TeraGo Inc and Bitterroot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitterroot Resources and TeraGo 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 TeraGo Inc are associated (or correlated) with Bitterroot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitterroot Resources has no effect on the direction of TeraGo i.e., TeraGo and Bitterroot Resources go up and down completely randomly.

Pair Corralation between TeraGo and Bitterroot Resources

If you would invest  158.00  in TeraGo Inc on January 31, 2024 and sell it today you would earn a total of  38.00  from holding TeraGo Inc or generate 24.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

TeraGo Inc  vs.  Bitterroot Resources

TeraGo Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TeraGo Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, TeraGo displayed solid returns over the last few months and may actually be approaching a breakup point.

Bitterroot Resources

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Bitterroot Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bitterroot Resources is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with TeraGo and Bitterroot Resources

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

The idea behind TeraGo Inc and Bitterroot Resources 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.