Correlation Between Champion Bear and Edison Cobalt
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Edison Cobalt 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 Edison Cobalt 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 Edison Cobalt Corp, you can compare the effects of market volatilities on Champion Bear and Edison Cobalt 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 Edison Cobalt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Edison Cobalt.
Diversification Opportunities for Champion Bear and Edison Cobalt
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champion and Edison is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Edison Cobalt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Cobalt Corp 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 Edison Cobalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Cobalt Corp has no effect on the direction of Champion Bear i.e., Champion Bear and Edison Cobalt go up and down completely randomly.
Pair Corralation between Champion Bear and Edison Cobalt
Assuming the 90 days horizon Champion Bear Resources is expected to generate 6.29 times more return on investment than Edison Cobalt. However, Champion Bear is 6.29 times more volatile than Edison Cobalt Corp. It trades about 0.07 of its potential returns per unit of risk. Edison Cobalt Corp is currently generating about 0.02 per unit of risk. If you would invest 4.00 in Champion Bear Resources on November 2, 2024 and sell it today you would lose (2.00) from holding Champion Bear Resources or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.02% |
| Values | Daily Returns |
Champion Bear Resources vs. Edison Cobalt Corp
Performance |
| Timeline |
| Champion Bear Resources |
| Edison Cobalt Corp |
Champion Bear and Edison Cobalt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Edison Cobalt
The main advantage of trading using opposite Champion Bear and Edison Cobalt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Edison Cobalt 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 Edison Cobalt will offset losses from the drop in Edison Cobalt's 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 |
| Edison Cobalt vs. Hannan Metals | Edison Cobalt vs. Atco Mining | Edison Cobalt vs. Leading Edge Materials | Edison Cobalt vs. Arianne Phosphate |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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