Correlation Between Canaf Investments and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Globex Mining 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 Canaf Investments and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Globex Mining Enterprises, you can compare the effects of market volatilities on Canaf Investments and Globex Mining 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 Canaf Investments with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Globex Mining.
Diversification Opportunities for Canaf Investments and Globex Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canaf and Globex is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and Canaf Investments 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 Canaf Investments are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Canaf Investments i.e., Canaf Investments and Globex Mining go up and down completely randomly.
Pair Corralation between Canaf Investments and Globex Mining
Assuming the 90 days horizon Canaf Investments is expected to generate 1.1 times less return on investment than Globex Mining. In addition to that, Canaf Investments is 1.04 times more volatile than Globex Mining Enterprises. It trades about 0.34 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.39 per unit of volatility. If you would invest 118.00 in Globex Mining Enterprises on November 4, 2024 and sell it today you would earn a total of 34.00 from holding Globex Mining Enterprises or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Globex Mining Enterprises
Performance |
| Timeline |
| Canaf Investments |
| Globex Mining Enterprises |
Canaf Investments and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Globex Mining
The main advantage of trading using opposite Canaf Investments and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Flinders Resources Limited | Canaf Investments vs. Orezone Gold Corp |
| Globex Mining vs. Chibougamau Independent Mines | Globex Mining vs. Entree Resources | Globex Mining vs. Solitario Exploration Royalty | Globex Mining vs. Forsys 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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