Correlation Between Arafura Resources and CDN Maverick
Can any of the company-specific risk be diversified away by investing in both Arafura Resources and CDN Maverick 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 Arafura Resources and CDN Maverick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arafura Resources and CDN Maverick Capital, you can compare the effects of market volatilities on Arafura Resources and CDN Maverick 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 Arafura Resources with a short position of CDN Maverick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arafura Resources and CDN Maverick.
Diversification Opportunities for Arafura Resources and CDN Maverick
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arafura and CDN is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arafura Resources and CDN Maverick Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN Maverick Capital and Arafura Resources 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 Arafura Resources are associated (or correlated) with CDN Maverick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN Maverick Capital has no effect on the direction of Arafura Resources i.e., Arafura Resources and CDN Maverick go up and down completely randomly.
Pair Corralation between Arafura Resources and CDN Maverick
Assuming the 90 days horizon Arafura Resources is expected to under-perform the CDN Maverick. In addition to that, Arafura Resources is 1.42 times more volatile than CDN Maverick Capital. It trades about -0.01 of its total potential returns per unit of risk. CDN Maverick Capital is currently generating about 0.03 per unit of volatility. If you would invest 10.00 in CDN Maverick Capital on August 29, 2024 and sell it today you would earn a total of 0.00 from holding CDN Maverick Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arafura Resources vs. CDN Maverick Capital
Performance |
| Timeline |
| Arafura Resources |
| CDN Maverick Capital |
Arafura Resources and CDN Maverick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arafura Resources and CDN Maverick
The main advantage of trading using opposite Arafura Resources and CDN Maverick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arafura Resources position performs unexpectedly, CDN Maverick 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 CDN Maverick will offset losses from the drop in CDN Maverick's long position.| Arafura Resources vs. Texas Rare Earth | Arafura Resources vs. Lynas Rare Earths | Arafura Resources vs. Ucore Rare Metals | Arafura Resources vs. Aurelia Metals Limited |
| CDN Maverick vs. Aurelia Metals Limited | CDN Maverick vs. Artemis Resources | CDN Maverick vs. Ascendant Resources | CDN Maverick vs. Azimut Exploration |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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