Correlation Between A-Cap Energy and Globex Mining
Can any of the company-specific risk be diversified away by investing in both A-Cap Energy 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 A-Cap Energy and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A Cap Energy Limited and Globex Mining Enterprises, you can compare the effects of market volatilities on A-Cap Energy 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 A-Cap Energy with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of A-Cap Energy and Globex Mining.
Diversification Opportunities for A-Cap Energy and Globex Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between A-Cap and Globex is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding A Cap Energy Limited 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 A-Cap Energy 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 A Cap Energy Limited 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 A-Cap Energy i.e., A-Cap Energy and Globex Mining go up and down completely randomly.
Pair Corralation between A-Cap Energy and Globex Mining
Assuming the 90 days horizon A Cap Energy Limited is expected to generate 8.31 times more return on investment than Globex Mining. However, A-Cap Energy is 8.31 times more volatile than Globex Mining Enterprises. It trades about 0.06 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.05 per unit of risk. If you would invest 6.00 in A Cap Energy Limited on September 1, 2024 and sell it today you would lose (3.40) from holding A Cap Energy Limited or give up 56.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
A Cap Energy Limited vs. Globex Mining Enterprises
Performance |
| Timeline |
| A Cap Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Globex Mining Enterprises |
A-Cap Energy and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A-Cap Energy and Globex Mining
The main advantage of trading using opposite A-Cap Energy and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A-Cap Energy 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.| A-Cap Energy vs. Champion Bear Resources | A-Cap Energy vs. Aurelia Metals Limited | A-Cap Energy vs. Baroyeca Gold Silver | A-Cap Energy vs. Centaurus Metals Limited |
| Globex Mining vs. South32 Limited | Globex Mining vs. NioCorp Developments Ltd | Globex Mining vs. HUMANA INC | Globex Mining vs. SCOR PK |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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