Correlation Between Cantex Mine and Critical Elements
Can any of the company-specific risk be diversified away by investing in both Cantex Mine and Critical Elements 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 Cantex Mine and Critical Elements into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantex Mine Development and Critical Elements, you can compare the effects of market volatilities on Cantex Mine and Critical Elements 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 Cantex Mine with a short position of Critical Elements. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Critical Elements.
Diversification Opportunities for Cantex Mine and Critical Elements
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cantex and Critical is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Critical Elements in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Elements and Cantex Mine 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 Cantex Mine Development are associated (or correlated) with Critical Elements. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Elements has no effect on the direction of Cantex Mine i.e., Cantex Mine and Critical Elements go up and down completely randomly.
Pair Corralation between Cantex Mine and Critical Elements
Assuming the 90 days horizon Cantex Mine Development is expected to under-perform the Critical Elements. In addition to that, Cantex Mine is 2.29 times more volatile than Critical Elements. It trades about -0.19 of its total potential returns per unit of risk. Critical Elements is currently generating about -0.33 per unit of volatility. If you would invest 40.00 in Critical Elements on August 29, 2024 and sell it today you would lose (11.00) from holding Critical Elements or give up 27.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cantex Mine Development vs. Critical Elements
Performance |
| Timeline |
| Cantex Mine Development |
| Critical Elements |
Cantex Mine and Critical Elements Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantex Mine and Critical Elements
The main advantage of trading using opposite Cantex Mine and Critical Elements positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantex Mine position performs unexpectedly, Critical Elements 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 Critical Elements will offset losses from the drop in Critical Elements' long position.| Cantex Mine vs. Champion Bear Resources | Cantex Mine vs. Aurelia Metals Limited | Cantex Mine vs. Baroyeca Gold Silver | Cantex Mine vs. Centaurus Metals Limited |
| Critical Elements vs. Ascendant Resources | Critical Elements vs. Cantex Mine Development | Critical Elements vs. Amarc Resources | Critical Elements vs. Sterling Metals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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