Correlation Between CCC SA and Globex Mining

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Can any of the company-specific risk be diversified away by investing in both CCC SA and Globex Mining 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 CCC SA and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCC SA and Globex Mining Enterprises, you can compare the effects of market volatilities on CCC SA and Globex Mining 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 CCC SA with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCC SA and Globex Mining.

Diversification Opportunities for CCC SA and Globex Mining

CCCGlobexDiversified AwayCCCGlobexDiversified Away100%
-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between CCC and Globex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CCC SA and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and CCC SA 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 CCC SA are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of CCC SA i.e., CCC SA and Globex Mining go up and down completely randomly.

Pair Corralation between CCC SA and Globex Mining

Assuming the 90 days horizon CCC SA is expected to generate 1.35 times more return on investment than Globex Mining. However, CCC SA is 1.35 times more volatile than Globex Mining Enterprises. It trades about 0.15 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.16 per unit of risk. If you would invest  4,178  in CCC SA on November 25, 2024 and sell it today you would earn a total of  504.00  from holding CCC SA or generate 12.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CCC SA  vs.  Globex Mining Enterprises

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10010203040
JavaScript chart by amCharts 3.21.156RK G1MN
       Timeline  
CCC SA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CCC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CCC SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb404244464850
Globex Mining Enterprises 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Globex Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.750.80.850.90.9511.05

CCC SA and Globex Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.21-6.9-4.59-2.270.03852.294.667.039.3911.76 0.020.040.060.08
JavaScript chart by amCharts 3.21.156RK G1MN
       Returns  

Pair Trading with CCC SA and Globex Mining

The main advantage of trading using opposite CCC SA and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCC SA position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.
The idea behind CCC SA and Globex Mining Enterprises 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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