Correlation Between Champion Bear and Canadian Palladium
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Canadian Palladium 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 Canadian Palladium 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 Canadian Palladium Resources, you can compare the effects of market volatilities on Champion Bear and Canadian Palladium 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 Canadian Palladium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Canadian Palladium.
Diversification Opportunities for Champion Bear and Canadian Palladium
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Canadian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Canadian Palladium Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Palladium 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 Canadian Palladium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Palladium has no effect on the direction of Champion Bear i.e., Champion Bear and Canadian Palladium go up and down completely randomly.
Pair Corralation between Champion Bear and Canadian Palladium
Assuming the 90 days horizon Champion Bear Resources is expected to generate 2.48 times more return on investment than Canadian Palladium. However, Champion Bear is 2.48 times more volatile than Canadian Palladium Resources. It trades about 0.05 of its potential returns per unit of risk. Canadian Palladium Resources is currently generating about 0.02 per unit of risk. If you would invest 6.00 in Champion Bear Resources on August 31, 2024 and sell it today you would lose (2.00) from holding Champion Bear Resources or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Bear Resources vs. Canadian Palladium Resources
Performance |
| Timeline |
| Champion Bear Resources |
| Canadian Palladium |
Champion Bear and Canadian Palladium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Canadian Palladium
The main advantage of trading using opposite Champion Bear and Canadian Palladium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Canadian Palladium 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 Canadian Palladium will offset losses from the drop in Canadian Palladium's long position.| Champion Bear vs. Liontown Resources Limited | Champion Bear vs. ATT Inc | Champion Bear vs. Merck Company | Champion Bear vs. Walt Disney |
| Canadian Palladium vs. Liontown Resources Limited | Canadian Palladium vs. ATT Inc | Canadian Palladium vs. Merck Company | Canadian Palladium vs. Walt Disney |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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