Correlation Between CANEX Metals and Magna Terra
Can any of the company-specific risk be diversified away by investing in both CANEX Metals and Magna Terra 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 CANEX Metals and Magna Terra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CANEX Metals and Magna Terra Minerals, you can compare the effects of market volatilities on CANEX Metals and Magna Terra 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 CANEX Metals with a short position of Magna Terra. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANEX Metals and Magna Terra.
Diversification Opportunities for CANEX Metals and Magna Terra
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CANEX and Magna is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CANEX Metals and Magna Terra Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Terra Minerals and CANEX Metals 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 CANEX Metals are associated (or correlated) with Magna Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Terra Minerals has no effect on the direction of CANEX Metals i.e., CANEX Metals and Magna Terra go up and down completely randomly.
Pair Corralation between CANEX Metals and Magna Terra
Assuming the 90 days trading horizon CANEX Metals is expected to generate 3.75 times less return on investment than Magna Terra. But when comparing it to its historical volatility, CANEX Metals is 1.97 times less risky than Magna Terra. It trades about 0.05 of its potential returns per unit of risk. Magna Terra Minerals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Magna Terra Minerals on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Magna Terra Minerals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANEX Metals vs. Magna Terra Minerals
Performance |
| Timeline |
| CANEX Metals |
| Magna Terra Minerals |
CANEX Metals and Magna Terra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANEX Metals and Magna Terra
The main advantage of trading using opposite CANEX Metals and Magna Terra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANEX Metals position performs unexpectedly, Magna Terra 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 Magna Terra will offset losses from the drop in Magna Terra's long position.| CANEX Metals vs. Magna Terra Minerals | CANEX Metals vs. Golden Pursuit Resources | CANEX Metals vs. Wildsky Resources | CANEX Metals vs. Inventus Mining Corp |
| Magna Terra vs. Wildsky Resources | Magna Terra vs. Golden Pursuit Resources | Magna Terra vs. ExGen Resources | Magna Terra vs. Fidelity Minerals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |