Correlation Between Contango ORE and 37045XDU7

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Can any of the company-specific risk be diversified away by investing in both Contango ORE and 37045XDU7 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 Contango ORE and 37045XDU7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contango ORE and GM 38 07 APR 25, you can compare the effects of market volatilities on Contango ORE and 37045XDU7 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 Contango ORE with a short position of 37045XDU7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contango ORE and 37045XDU7.

Diversification Opportunities for Contango ORE and 37045XDU7

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Contango and 37045XDU7 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and GM 38 07 APR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 37045XDU7 and Contango ORE 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 Contango ORE are associated (or correlated) with 37045XDU7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 37045XDU7 has no effect on the direction of Contango ORE i.e., Contango ORE and 37045XDU7 go up and down completely randomly.

Pair Corralation between Contango ORE and 37045XDU7

Given the investment horizon of 90 days Contango ORE is expected to under-perform the 37045XDU7. In addition to that, Contango ORE is 17.3 times more volatile than GM 38 07 APR 25. It trades about -0.02 of its total potential returns per unit of risk. GM 38 07 APR 25 is currently generating about 0.02 per unit of volatility. If you would invest  9,716  in GM 38 07 APR 25 on October 25, 2024 and sell it today you would earn a total of  220.00  from holding GM 38 07 APR 25 or generate 2.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.35%
ValuesDaily Returns

Contango ORE  vs.  GM 38 07 APR 25

 Performance 
       Timeline  
Contango ORE 

Risk-Adjusted Performance

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Weak
 
Strong
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Over the last 90 days Contango ORE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
37045XDU7 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GM 38 07 APR 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 37045XDU7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Contango ORE and 37045XDU7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Contango ORE and 37045XDU7

The main advantage of trading using opposite Contango ORE and 37045XDU7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE position performs unexpectedly, 37045XDU7 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 37045XDU7 will offset losses from the drop in 37045XDU7's long position.
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The idea behind Contango ORE and GM 38 07 APR 25 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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