Correlation Between Canstar Resources and Pegasus Resources
Can any of the company-specific risk be diversified away by investing in both Canstar Resources and Pegasus 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 Canstar Resources and Pegasus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canstar Resources and Pegasus Resources, you can compare the effects of market volatilities on Canstar Resources and Pegasus 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 Canstar Resources with a short position of Pegasus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canstar Resources and Pegasus Resources.
Diversification Opportunities for Canstar Resources and Pegasus Resources
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canstar and Pegasus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Canstar Resources and Pegasus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Resources and Canstar 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 Canstar Resources are associated (or correlated) with Pegasus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Resources has no effect on the direction of Canstar Resources i.e., Canstar Resources and Pegasus Resources go up and down completely randomly.
Pair Corralation between Canstar Resources and Pegasus Resources
Assuming the 90 days horizon Canstar Resources is expected to under-perform the Pegasus Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Canstar Resources is 2.47 times less risky than Pegasus Resources. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Pegasus Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Pegasus Resources on September 1, 2024 and sell it today you would lose (3.00) from holding Pegasus Resources or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canstar Resources vs. Pegasus Resources
Performance |
| Timeline |
| Canstar Resources |
| Pegasus Resources |
Canstar Resources and Pegasus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canstar Resources and Pegasus Resources
The main advantage of trading using opposite Canstar Resources and Pegasus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canstar Resources position performs unexpectedly, Pegasus 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 Pegasus Resources will offset losses from the drop in Pegasus Resources' long position.| Canstar Resources vs. Kenorland Minerals | Canstar Resources vs. Prime Mining Corp | Canstar Resources vs. Euro Manganese | Canstar Resources vs. Chalice Mining Limited |
| Pegasus Resources vs. ATT Inc | Pegasus Resources vs. Merck Company | Pegasus Resources vs. Walt Disney | Pegasus Resources vs. Caterpillar |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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