Correlation Between CMC Metals and Integra Resources
Can any of the company-specific risk be diversified away by investing in both CMC Metals and Integra Resources 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 CMC Metals and Integra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMC Metals and Integra Resources Corp, you can compare the effects of market volatilities on CMC Metals and Integra Resources 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 CMC Metals with a short position of Integra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMC Metals and Integra Resources.
Diversification Opportunities for CMC Metals and Integra Resources
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CMC and Integra is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CMC Metals and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources Corp and CMC Metals 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 CMC Metals are associated (or correlated) with Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of CMC Metals i.e., CMC Metals and Integra Resources go up and down completely randomly.
Pair Corralation between CMC Metals and Integra Resources
Assuming the 90 days horizon CMC Metals is expected to generate 6.34 times more return on investment than Integra Resources. However, CMC Metals is 6.34 times more volatile than Integra Resources Corp. It trades about 0.08 of its potential returns per unit of risk. Integra Resources Corp is currently generating about 0.02 per unit of risk. If you would invest 10.00 in CMC Metals on September 2, 2024 and sell it today you would lose (8.58) from holding CMC Metals or give up 85.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMC Metals vs. Integra Resources Corp
Performance |
| Timeline |
| CMC Metals |
| Integra Resources Corp |
CMC Metals and Integra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMC Metals and Integra Resources
The main advantage of trading using opposite CMC Metals and Integra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMC Metals position performs unexpectedly, Integra Resources 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 Integra Resources will offset losses from the drop in Integra Resources' long position.| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Gatos Silver |
| Integra Resources vs. Silver Tiger Metals | Integra Resources vs. Defiance Silver Corp | Integra Resources vs. Summa Silver Corp | Integra Resources vs. AbraSilver Resource 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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