Correlation Between Champion Bear and Almonty Industries
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Almonty Industries 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 Champion Bear and Almonty Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Bear Resources and Almonty Industries, you can compare the effects of market volatilities on Champion Bear and Almonty Industries 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 Champion Bear with a short position of Almonty Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Almonty Industries.
Diversification Opportunities for Champion Bear and Almonty Industries
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Champion and Almonty is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Almonty Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almonty Industries and Champion Bear 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 Champion Bear Resources are associated (or correlated) with Almonty Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almonty Industries has no effect on the direction of Champion Bear i.e., Champion Bear and Almonty Industries go up and down completely randomly.
Pair Corralation between Champion Bear and Almonty Industries
Assuming the 90 days horizon Champion Bear Resources is expected to under-perform the Almonty Industries. In addition to that, Champion Bear is 2.19 times more volatile than Almonty Industries. It trades about -0.22 of its total potential returns per unit of risk. Almonty Industries is currently generating about 0.16 per unit of volatility. If you would invest 58.00 in Almonty Industries on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Almonty Industries or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Bear Resources vs. Almonty Industries
Performance |
| Timeline |
| Champion Bear Resources |
| Almonty Industries |
Champion Bear and Almonty Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Almonty Industries
The main advantage of trading using opposite Champion Bear and Almonty Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Almonty Industries 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 Almonty Industries will offset losses from the drop in Almonty Industries' long position.| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt Corp |
| Almonty Industries vs. Ascendant Resources | Almonty Industries vs. Cantex Mine Development | Almonty Industries vs. Amarc Resources | Almonty Industries vs. Sterling 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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