Correlation Between Bear Creek and Excellon Resources
Can any of the company-specific risk be diversified away by investing in both Bear Creek and Excellon 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 Bear Creek and Excellon Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bear Creek Mining and Excellon Resources, you can compare the effects of market volatilities on Bear Creek and Excellon 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 Bear Creek with a short position of Excellon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bear Creek and Excellon Resources.
Diversification Opportunities for Bear Creek and Excellon Resources
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bear and Excellon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bear Creek Mining and Excellon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellon Resources and Bear Creek 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 Bear Creek Mining are associated (or correlated) with Excellon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellon Resources has no effect on the direction of Bear Creek i.e., Bear Creek and Excellon Resources go up and down completely randomly.
Pair Corralation between Bear Creek and Excellon Resources
Assuming the 90 days horizon Bear Creek Mining is expected to under-perform the Excellon Resources. In addition to that, Bear Creek is 1.51 times more volatile than Excellon Resources. It trades about -0.18 of its total potential returns per unit of risk. Excellon Resources is currently generating about -0.1 per unit of volatility. If you would invest 11.00 in Excellon Resources on August 28, 2024 and sell it today you would lose (1.50) from holding Excellon Resources or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bear Creek Mining vs. Excellon Resources
Performance |
| Timeline |
| Bear Creek Mining |
| Excellon Resources |
Bear Creek and Excellon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bear Creek and Excellon Resources
The main advantage of trading using opposite Bear Creek and Excellon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bear Creek position performs unexpectedly, Excellon 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 Excellon Resources will offset losses from the drop in Excellon Resources' long position.| Bear Creek vs. IMPACT Silver Corp | Bear Creek vs. Golden Goliath Resources | Bear Creek vs. Minera Alamos | Bear Creek vs. Chesapeake Gold Corp |
| Excellon Resources vs. Minco Silver | Excellon Resources vs. Americas Silver Corp | Excellon Resources vs. IMPACT Silver Corp | Excellon Resources vs. Dolly Varden Silver |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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