Correlation Between Champion Bear and Global Energy
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Global Energy 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 Global Energy 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 Global Energy Metals, you can compare the effects of market volatilities on Champion Bear and Global Energy 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 Global Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Global Energy.
Diversification Opportunities for Champion Bear and Global Energy
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Global is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Global Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Energy Metals 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 Global Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Energy Metals has no effect on the direction of Champion Bear i.e., Champion Bear and Global Energy go up and down completely randomly.
Pair Corralation between Champion Bear and Global Energy
Assuming the 90 days horizon Champion Bear Resources is expected to under-perform the Global Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Champion Bear Resources is 1.97 times less risky than Global Energy. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Global Energy Metals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Global Energy Metals on August 29, 2024 and sell it today you would earn a total of 0.23 from holding Global Energy Metals or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Champion Bear Resources vs. Global Energy Metals
Performance |
| Timeline |
| Champion Bear Resources |
| Global Energy Metals |
Champion Bear and Global Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Global Energy
The main advantage of trading using opposite Champion Bear and Global Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Global Energy 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 Global Energy will offset losses from the drop in Global Energy'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 |
| Global Energy vs. Rockridge Resources | Global Energy vs. Ameriwest Lithium | Global Energy vs. Osisko Metals Incorporated | Global Energy vs. Volt Lithium 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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