Correlation Between Commerce Resources and ADF
Can any of the company-specific risk be diversified away by investing in both Commerce Resources and ADF 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 Commerce Resources and ADF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerce Resources Corp and ADF Group, you can compare the effects of market volatilities on Commerce Resources and ADF 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 Commerce Resources with a short position of ADF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerce Resources and ADF.
Diversification Opportunities for Commerce Resources and ADF
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Commerce and ADF is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Commerce Resources Corp and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group and Commerce Resources 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 Commerce Resources Corp are associated (or correlated) with ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Commerce Resources i.e., Commerce Resources and ADF go up and down completely randomly.
Pair Corralation between Commerce Resources and ADF
If you would invest 942.00 in ADF Group on September 24, 2024 and sell it today you would earn a total of 77.00 from holding ADF Group or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerce Resources Corp vs. ADF Group
Performance |
| Timeline |
| Commerce Resources Corp |
| ADF Group |
Commerce Resources and ADF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerce Resources and ADF
The main advantage of trading using opposite Commerce Resources and ADF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerce Resources position performs unexpectedly, ADF 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 ADF will offset losses from the drop in ADF's long position.| Commerce Resources vs. Monarca Minerals | Commerce Resources vs. Outcrop Gold Corp | Commerce Resources vs. Grande Portage Resources | Commerce Resources vs. Klondike Silver Corp |
| ADF vs. IBC Advanced Alloys | ADF vs. Ucore Rare Metals | ADF vs. Commerce Resources Corp | ADF vs. Focus Graphite |
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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