Correlation Between TVI Pacific and IMetal Resources

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

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

Diversification Opportunities for TVI Pacific and IMetal Resources

0.39

Correlation Coefficient

TVI Pacific  IMetal Resources

Weak diversification

The 3 months correlation between TVI and IMetal is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding TVI Pacific and iMetal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iMetal Resources and TVI Pacific 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 TVI Pacific are associated (or correlated) with IMetal Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iMetal Resources has no effect on the direction of TVI Pacific i.e., TVI Pacific and IMetal Resources go up and down completely randomly.

Pair Corralation between TVI Pacific and IMetal Resources

Assuming the 90 days horizon TVI Pacific is expected to generate 3.54 times more return on investment than IMetal Resources. However, TVI Pacific is 3.54 times more volatile than iMetal Resources. It trades about 0.11 of its potential returns per unit of risk. iMetal Resources is currently generating about 0.11 per unit of risk. If you would invest  1.42  in TVI Pacific on May 7, 2025 and sell it today you would earn a total of  0.58  from holding TVI Pacific or generate 40.85% return on investment over 90 days.

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

TVI Pacific  vs.  iMetal Resources

TVI Pacific

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TVI Pacific are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TVI Pacific reported solid returns over the last few months and may actually be approaching a breakup point.

iMetal Resources

Risk-Adjusted Performance

OK

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

Pair Trading with TVI Pacific and IMetal Resources

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

The idea behind TVI Pacific and iMetal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.