Correlation Between Champion Bear and Sterling Metals
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Sterling Metals 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 Sterling Metals 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 Sterling Metals Corp, you can compare the effects of market volatilities on Champion Bear and Sterling Metals 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 Sterling Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Sterling Metals.
Diversification Opportunities for Champion Bear and Sterling Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Sterling is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Sterling Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Metals 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 Sterling Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Metals Corp has no effect on the direction of Champion Bear i.e., Champion Bear and Sterling Metals go up and down completely randomly.
Pair Corralation between Champion Bear and Sterling Metals
Assuming the 90 days horizon Champion Bear Resources is expected to generate 1.19 times more return on investment than Sterling Metals. However, Champion Bear is 1.19 times more volatile than Sterling Metals Corp. It trades about -0.07 of its potential returns per unit of risk. Sterling Metals Corp is currently generating about -0.14 per unit of risk. If you would invest 5.00 in Champion Bear Resources on August 24, 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 Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Champion Bear Resources vs. Sterling Metals Corp
Performance |
| Timeline |
| Champion Bear Resources |
| Sterling Metals Corp |
Champion Bear and Sterling Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Sterling Metals
The main advantage of trading using opposite Champion Bear and Sterling Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Sterling Metals 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 Sterling Metals will offset losses from the drop in Sterling Metals' long position.| Champion Bear vs. Norra Metals Corp | Champion Bear vs. Amarc Resources | Champion Bear vs. ZincX Resources Corp | Champion Bear vs. Nuinsco Resources Limited |
| Sterling Metals vs. Norra Metals Corp | Sterling Metals vs. Amarc Resources | Sterling Metals vs. ZincX Resources Corp | Sterling Metals vs. Nuinsco Resources Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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