Correlation Between Bravo Mining and CMC Metals
Can any of the company-specific risk be diversified away by investing in both Bravo Mining and CMC 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 Bravo Mining and CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bravo Mining Corp and CMC Metals, you can compare the effects of market volatilities on Bravo Mining and CMC 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 Bravo Mining with a short position of CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravo Mining and CMC Metals.
Diversification Opportunities for Bravo Mining and CMC Metals
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bravo and CMC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bravo Mining Corp and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals and Bravo Mining 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 Bravo Mining Corp are associated (or correlated) with CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of Bravo Mining i.e., Bravo Mining and CMC Metals go up and down completely randomly.
Pair Corralation between Bravo Mining and CMC Metals
Assuming the 90 days horizon Bravo Mining Corp is expected to under-perform the CMC Metals. But the otc stock apears to be less risky and, when comparing its historical volatility, Bravo Mining Corp is 9.92 times less risky than CMC Metals. The otc stock trades about -0.29 of its potential returns per unit of risk. The CMC Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.00 in CMC Metals on August 30, 2024 and sell it today you would lose (0.50) from holding CMC Metals or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bravo Mining Corp vs. CMC Metals
Performance |
| Timeline |
| Bravo Mining Corp |
| CMC Metals |
Bravo Mining and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bravo Mining and CMC Metals
The main advantage of trading using opposite Bravo Mining and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravo Mining position performs unexpectedly, CMC 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 CMC Metals will offset losses from the drop in CMC Metals' long position.| Bravo Mining vs. Alien Metals | Bravo Mining vs. Capella Minerals Limited | Bravo Mining vs. Honey Badger Silver | Bravo Mining vs. Auxico Resources Canada |
| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Gatos 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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