Correlation Between Champion Bear and Benton Resources
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Benton Resources 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 Benton Resources 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 Benton Resources, you can compare the effects of market volatilities on Champion Bear and Benton Resources 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 Benton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Benton Resources.
Diversification Opportunities for Champion Bear and Benton Resources
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Champion and Benton is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Benton Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benton Resources 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 Benton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benton Resources has no effect on the direction of Champion Bear i.e., Champion Bear and Benton Resources go up and down completely randomly.
Pair Corralation between Champion Bear and Benton Resources
Assuming the 90 days horizon Champion Bear is expected to generate 1.5 times less return on investment than Benton Resources. In addition to that, Champion Bear is 1.53 times more volatile than Benton Resources. It trades about 0.04 of its total potential returns per unit of risk. Benton Resources is currently generating about 0.09 per unit of volatility. If you would invest 8.00 in Benton Resources on August 29, 2024 and sell it today you would lose (3.00) from holding Benton Resources or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Bear Resources vs. Benton Resources
Performance |
| Timeline |
| Champion Bear Resources |
| Benton Resources |
Champion Bear and Benton Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Benton Resources
The main advantage of trading using opposite Champion Bear and Benton Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Benton Resources 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 Benton Resources will offset losses from the drop in Benton Resources' 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 |
| Benton Resources vs. Silver Hammer Mining | Benton Resources vs. Reyna Silver Corp | Benton Resources vs. Guanajuato Silver | Benton Resources vs. Silver One Resources |
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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