Correlation Between CCL Industries and ValOre Metals
Can any of the company-specific risk be diversified away by investing in both CCL Industries and ValOre 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 CCL Industries and ValOre Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and ValOre Metals Corp, you can compare the effects of market volatilities on CCL Industries and ValOre 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 CCL Industries with a short position of ValOre Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and ValOre Metals.
Diversification Opportunities for CCL Industries and ValOre Metals
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CCL and ValOre is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and ValOre Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ValOre Metals Corp and CCL Industries 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 CCL Industries are associated (or correlated) with ValOre Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ValOre Metals Corp has no effect on the direction of CCL Industries i.e., CCL Industries and ValOre Metals go up and down completely randomly.
Pair Corralation between CCL Industries and ValOre Metals
Assuming the 90 days trading horizon CCL Industries is expected to generate 2.79 times less return on investment than ValOre Metals. But when comparing it to its historical volatility, CCL Industries is 6.64 times less risky than ValOre Metals. It trades about 0.04 of its potential returns per unit of risk. ValOre Metals Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 28.00 in ValOre Metals Corp on August 23, 2024 and sell it today you would lose (20.00) from holding ValOre Metals Corp or give up 71.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. ValOre Metals Corp
Performance |
| Timeline |
| CCL Industries |
| ValOre Metals Corp |
CCL Industries and ValOre Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and ValOre Metals
The main advantage of trading using opposite CCL Industries and ValOre Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, ValOre 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 ValOre Metals will offset losses from the drop in ValOre Metals' long position.| CCL Industries vs. Fairfax Financial Holdings | CCL Industries vs. US Financial 15 | CCL Industries vs. Aurora Solar Technologies | CCL Industries vs. Solar Alliance Energy |
| ValOre Metals vs. ALX Uranium Corp | ValOre Metals vs. Forum Energy Metals | ValOre Metals vs. K2 Gold | ValOre Metals vs. Blue Sky Uranium |
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 Stocks Directory module to find actively traded stocks across global markets.
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