Correlation Between Champion Iron and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both Champion Iron and CANEX 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 Iron and CANEX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and CANEX Metals, you can compare the effects of market volatilities on Champion Iron and CANEX 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 Iron with a short position of CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and CANEX Metals.
Diversification Opportunities for Champion Iron and CANEX Metals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Champion and CANEX is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals and Champion Iron 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 Iron are associated (or correlated) with CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of Champion Iron i.e., Champion Iron and CANEX Metals go up and down completely randomly.
Pair Corralation between Champion Iron and CANEX Metals
Assuming the 90 days trading horizon Champion Iron is expected to generate 12.97 times less return on investment than CANEX Metals. But when comparing it to its historical volatility, Champion Iron is 4.24 times less risky than CANEX Metals. It trades about 0.01 of its potential returns per unit of risk. CANEX Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.00 in CANEX Metals on September 4, 2024 and sell it today you would lose (2.00) from holding CANEX Metals or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Champion Iron vs. CANEX Metals
Performance |
| Timeline |
| Champion Iron |
| CANEX Metals |
Champion Iron and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and CANEX Metals
The main advantage of trading using opposite Champion Iron and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, CANEX 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 CANEX Metals will offset losses from the drop in CANEX Metals' long position.| Champion Iron vs. Black Iron | Champion Iron vs. Wesdome Gold Mines | Champion Iron vs. GoGold Resources | Champion Iron vs. Mason Graphite |
| CANEX Metals vs. First Majestic Silver | CANEX Metals vs. Ivanhoe Energy | CANEX Metals vs. Orezone Gold Corp | CANEX Metals vs. Faraday Copper Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |