Correlation Between Ascendant Resources and Grid Metals
Can any of the company-specific risk be diversified away by investing in both Ascendant Resources and Grid Metals 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 Ascendant Resources and Grid Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendant Resources and Grid Metals Corp, you can compare the effects of market volatilities on Ascendant Resources and Grid Metals 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 Ascendant Resources with a short position of Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendant Resources and Grid Metals.
Diversification Opportunities for Ascendant Resources and Grid Metals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ascendant and Grid is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ascendant Resources and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals Corp and Ascendant 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 Ascendant Resources are associated (or correlated) with Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of Ascendant Resources i.e., Ascendant Resources and Grid Metals go up and down completely randomly.
Pair Corralation between Ascendant Resources and Grid Metals
Assuming the 90 days horizon Ascendant Resources is expected to generate 1.52 times more return on investment than Grid Metals. However, Ascendant Resources is 1.52 times more volatile than Grid Metals Corp. It trades about 0.0 of its potential returns per unit of risk. Grid Metals Corp is currently generating about -0.18 per unit of risk. If you would invest 4.00 in Ascendant Resources on August 29, 2024 and sell it today you would lose (0.68) from holding Ascendant Resources or give up 17.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendant Resources vs. Grid Metals Corp
Performance |
| Timeline |
| Ascendant Resources |
| Grid Metals Corp |
Ascendant Resources and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendant Resources and Grid Metals
The main advantage of trading using opposite Ascendant Resources and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendant Resources position performs unexpectedly, Grid Metals 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 Grid Metals will offset losses from the drop in Grid Metals' long position.| Ascendant Resources vs. Edison Cobalt Corp | Ascendant Resources vs. Champion Bear Resources | Ascendant Resources vs. Avarone Metals | Ascendant Resources vs. Adriatic Metals PLC |
| Grid Metals vs. Ascendant Resources | Grid Metals vs. Cantex Mine Development | Grid Metals vs. Amarc Resources | Grid Metals vs. Sterling Metals Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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