Correlation Between Commerce Resources and StrikePoint Gold
Can any of the company-specific risk be diversified away by investing in both Commerce Resources and StrikePoint Gold 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 StrikePoint Gold 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 StrikePoint Gold, you can compare the effects of market volatilities on Commerce Resources and StrikePoint Gold 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 StrikePoint Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerce Resources and StrikePoint Gold.
Diversification Opportunities for Commerce Resources and StrikePoint Gold
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Commerce and StrikePoint is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Commerce Resources Corp and StrikePoint Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StrikePoint Gold 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 StrikePoint Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StrikePoint Gold has no effect on the direction of Commerce Resources i.e., Commerce Resources and StrikePoint Gold go up and down completely randomly.
Pair Corralation between Commerce Resources and StrikePoint Gold
Assuming the 90 days horizon Commerce Resources is expected to generate 145.76 times less return on investment than StrikePoint Gold. But when comparing it to its historical volatility, Commerce Resources Corp is 17.49 times less risky than StrikePoint Gold. It trades about 0.02 of its potential returns per unit of risk. StrikePoint Gold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 34.00 in StrikePoint Gold on October 22, 2024 and sell it today you would lose (20.00) from holding StrikePoint Gold or give up 58.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerce Resources Corp vs. StrikePoint Gold
Performance |
| Timeline |
| Commerce Resources Corp |
| StrikePoint Gold |
Commerce Resources and StrikePoint Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerce Resources and StrikePoint Gold
The main advantage of trading using opposite Commerce Resources and StrikePoint Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerce Resources position performs unexpectedly, StrikePoint Gold 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 StrikePoint Gold will offset losses from the drop in StrikePoint Gold's long position.| Commerce Resources vs. Great Western Minerals | Commerce Resources vs. StrikePoint Gold | Commerce Resources vs. Silver Elephant Mining | Commerce Resources vs. Eskay Mining Corp |
| StrikePoint Gold vs. Commerce Resources Corp | StrikePoint Gold vs. Great Western Minerals | StrikePoint Gold vs. Silver Elephant Mining | StrikePoint Gold vs. Eskay Mining 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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