Correlation Between CAT Strategic and Grizzly Discoveries
Can any of the company-specific risk be diversified away by investing in both CAT Strategic and Grizzly Discoveries 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 CAT Strategic and Grizzly Discoveries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAT Strategic Metals and Grizzly Discoveries, you can compare the effects of market volatilities on CAT Strategic and Grizzly Discoveries 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 CAT Strategic with a short position of Grizzly Discoveries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAT Strategic and Grizzly Discoveries.
Diversification Opportunities for CAT Strategic and Grizzly Discoveries
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between CAT and Grizzly is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CAT Strategic Metals and Grizzly Discoveries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Discoveries and CAT Strategic 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 CAT Strategic Metals are associated (or correlated) with Grizzly Discoveries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Discoveries has no effect on the direction of CAT Strategic i.e., CAT Strategic and Grizzly Discoveries go up and down completely randomly.
Pair Corralation between CAT Strategic and Grizzly Discoveries
Assuming the 90 days horizon CAT Strategic Metals is expected to generate 20.73 times more return on investment than Grizzly Discoveries. However, CAT Strategic is 20.73 times more volatile than Grizzly Discoveries. It trades about 0.23 of its potential returns per unit of risk. Grizzly Discoveries is currently generating about -0.21 per unit of risk. If you would invest 0.14 in CAT Strategic Metals on August 25, 2024 and sell it today you would earn a total of 0.26 from holding CAT Strategic Metals or generate 185.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CAT Strategic Metals vs. Grizzly Discoveries
Performance |
| Timeline |
| CAT Strategic Metals |
| Grizzly Discoveries |
CAT Strategic and Grizzly Discoveries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAT Strategic and Grizzly Discoveries
The main advantage of trading using opposite CAT Strategic and Grizzly Discoveries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAT Strategic position performs unexpectedly, Grizzly Discoveries 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 Grizzly Discoveries will offset losses from the drop in Grizzly Discoveries' long position.| CAT Strategic vs. Glen Eagle Resources | CAT Strategic vs. Grizzly Discoveries | CAT Strategic vs. Silver Dollar Resources | CAT Strategic vs. Defense Metals Corp |
| Grizzly Discoveries vs. Norra Metals Corp | Grizzly Discoveries vs. Amarc Resources | Grizzly Discoveries vs. ZincX Resources Corp | Grizzly Discoveries vs. Nuinsco Resources Limited |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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