Correlation Between Boliden AB and Commerce Resources
Can any of the company-specific risk be diversified away by investing in both Boliden AB and Commerce 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 Boliden AB and Commerce Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB ADR and Commerce Resources Corp, you can compare the effects of market volatilities on Boliden AB and Commerce 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 Boliden AB with a short position of Commerce Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and Commerce Resources.
Diversification Opportunities for Boliden AB and Commerce Resources
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boliden and Commerce is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB ADR and Commerce Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Resources Corp and Boliden AB 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 Boliden AB ADR are associated (or correlated) with Commerce Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Resources Corp has no effect on the direction of Boliden AB i.e., Boliden AB and Commerce Resources go up and down completely randomly.
Pair Corralation between Boliden AB and Commerce Resources
Assuming the 90 days horizon Boliden AB ADR is expected to generate 0.27 times more return on investment than Commerce Resources. However, Boliden AB ADR is 3.7 times less risky than Commerce Resources. It trades about -0.04 of its potential returns per unit of risk. Commerce Resources Corp is currently generating about -0.03 per unit of risk. If you would invest 6,984 in Boliden AB ADR on August 29, 2024 and sell it today you would lose (1,049) from holding Boliden AB ADR or give up 15.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB ADR vs. Commerce Resources Corp
Performance |
| Timeline |
| Boliden AB ADR |
| Commerce Resources Corp |
Boliden AB and Commerce Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and Commerce Resources
The main advantage of trading using opposite Boliden AB and Commerce Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, Commerce 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 Commerce Resources will offset losses from the drop in Commerce Resources' long position.| Boliden AB vs. Rockridge Resources | Boliden AB vs. Ameriwest Lithium | Boliden AB vs. Osisko Metals Incorporated | Boliden AB vs. Volt Lithium Corp |
| Commerce Resources vs. Silver Hammer Mining | Commerce Resources vs. Reyna Silver Corp | Commerce Resources vs. Guanajuato Silver | Commerce Resources vs. Silver One Resources |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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