Correlation Between Champion Bear and O3 Mining
Can any of the company-specific risk be diversified away by investing in both Champion Bear and O3 Mining 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 O3 Mining 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 O3 Mining, you can compare the effects of market volatilities on Champion Bear and O3 Mining 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 O3 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and O3 Mining.
Diversification Opportunities for Champion Bear and O3 Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Champion and OIIIF is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and O3 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O3 Mining 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 O3 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O3 Mining has no effect on the direction of Champion Bear i.e., Champion Bear and O3 Mining go up and down completely randomly.
Pair Corralation between Champion Bear and O3 Mining
Assuming the 90 days horizon Champion Bear Resources is expected to generate 3.52 times more return on investment than O3 Mining. However, Champion Bear is 3.52 times more volatile than O3 Mining. It trades about 0.04 of its potential returns per unit of risk. O3 Mining is currently generating about -0.03 per unit of risk. If you would invest 5.00 in Champion Bear Resources on August 31, 2024 and sell it today you would lose (1.00) from holding Champion Bear Resources or give up 20.0% 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. O3 Mining
Performance |
| Timeline |
| Champion Bear Resources |
| O3 Mining |
Champion Bear and O3 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and O3 Mining
The main advantage of trading using opposite Champion Bear and O3 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, O3 Mining 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 O3 Mining will offset losses from the drop in O3 Mining's long position.| Champion Bear vs. Liontown Resources Limited | Champion Bear vs. ATT Inc | Champion Bear vs. Merck Company | Champion Bear vs. Walt Disney |
| O3 Mining vs. Canstar Resources | O3 Mining vs. Benton Resources | O3 Mining vs. Prime Mining Corp | O3 Mining vs. Silver X Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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