Correlation Between Champion Bear and Pan Global

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Can any of the company-specific risk be diversified away by investing in both Champion Bear and Pan Global 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 Pan Global 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 Pan Global Resources, you can compare the effects of market volatilities on Champion Bear and Pan Global 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 Pan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Pan Global.

Diversification Opportunities for Champion Bear and Pan Global

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Champion and Pan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Pan Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Global 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 Pan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Global Resources has no effect on the direction of Champion Bear i.e., Champion Bear and Pan Global go up and down completely randomly.

Pair Corralation between Champion Bear and Pan Global

Assuming the 90 days horizon Champion Bear Resources is not expected to generate positive returns. Moreover, Champion Bear is 3.83 times more volatile than Pan Global Resources. It trades away all of its potential returns to assume current level of volatility. Pan Global Resources is currently generating about 0.07 per unit of risk. If you would invest  9.50  in Pan Global Resources on November 27, 2024 and sell it today you would earn a total of  0.50  from holding Pan Global Resources or generate 5.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Champion Bear Resources  vs.  Pan Global Resources

 Performance 
       Timeline  
Champion Bear Resources 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Champion Bear Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Champion Bear reported solid returns over the last few months and may actually be approaching a breakup point.
Pan Global Resources 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Pan Global Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Pan Global reported solid returns over the last few months and may actually be approaching a breakup point.

Champion Bear and Pan Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Champion Bear and Pan Global

The main advantage of trading using opposite Champion Bear and Pan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Pan Global 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 Pan Global will offset losses from the drop in Pan Global's long position.
The idea behind Champion Bear Resources and Pan Global Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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