Correlation Between Champion Iron and Great West
Can any of the company-specific risk be diversified away by investing in both Champion Iron and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Great West Lifeco, you can compare the effects of market volatilities on Champion Iron and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Great West.
Diversification Opportunities for Champion Iron and Great West
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Champion and Great is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Champion Iron i.e., Champion Iron and Great West go up and down completely randomly.
Pair Corralation between Champion Iron and Great West
Assuming the 90 days trading horizon Champion Iron is expected to generate 5.37 times more return on investment than Great West. However, Champion Iron is 5.37 times more volatile than Great West Lifeco. It trades about -0.02 of its potential returns per unit of risk. Great West Lifeco is currently generating about -0.17 per unit of risk. If you would invest 554.00 in Champion Iron on September 5, 2024 and sell it today you would lose (12.00) from holding Champion Iron or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. Great West Lifeco
Performance |
| Timeline |
| Champion Iron |
| Great West Lifeco |
Champion Iron and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Great West
The main advantage of trading using opposite Champion Iron and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Champion Iron vs. Black Iron | Champion Iron vs. Wesdome Gold Mines | Champion Iron vs. GoGold Resources | Champion Iron vs. Mason Graphite |
| Great West vs. Bragg Gaming Group | Great West vs. Champion Iron | Great West vs. TGS Esports | Great West vs. Champion Gaming Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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