Correlation Between Cobalt Blue and Sherritt International
Can any of the company-specific risk be diversified away by investing in both Cobalt Blue and Sherritt International 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 Cobalt Blue and Sherritt International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cobalt Blue Holdings and Sherritt International, you can compare the effects of market volatilities on Cobalt Blue and Sherritt International 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 Cobalt Blue with a short position of Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cobalt Blue and Sherritt International.
Diversification Opportunities for Cobalt Blue and Sherritt International
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cobalt and Sherritt is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cobalt Blue Holdings and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International and Cobalt Blue 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 Cobalt Blue Holdings are associated (or correlated) with Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of Cobalt Blue i.e., Cobalt Blue and Sherritt International go up and down completely randomly.
Pair Corralation between Cobalt Blue and Sherritt International
Assuming the 90 days horizon Cobalt Blue Holdings is expected to under-perform the Sherritt International. In addition to that, Cobalt Blue is 3.41 times more volatile than Sherritt International. It trades about -0.14 of its total potential returns per unit of risk. Sherritt International is currently generating about -0.32 per unit of volatility. If you would invest 14.00 in Sherritt International on September 2, 2024 and sell it today you would lose (2.00) from holding Sherritt International or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cobalt Blue Holdings vs. Sherritt International
Performance |
| Timeline |
| Cobalt Blue Holdings |
| Sherritt International |
Cobalt Blue and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cobalt Blue and Sherritt International
The main advantage of trading using opposite Cobalt Blue and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cobalt Blue position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.| Cobalt Blue vs. Aurelia Metals Limited | Cobalt Blue vs. Centaurus Metals Limited | Cobalt Blue vs. Artemis Resources | Cobalt Blue vs. Ascendant Resources |
| Sherritt International vs. Metals X Limited | Sherritt International vs. Interra Copper Corp | Sherritt International vs. Anglo American PLC | Sherritt International vs. OM Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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