Correlation Between Cantex Mine and KWG Resources
Can any of the company-specific risk be diversified away by investing in both Cantex Mine and KWG 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 Cantex Mine and KWG Resources 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 KWG Resources, you can compare the effects of market volatilities on Cantex Mine and KWG 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 Cantex Mine with a short position of KWG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and KWG Resources.
Diversification Opportunities for Cantex Mine and KWG Resources
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cantex and KWG is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and KWG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Resources 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 KWG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Resources has no effect on the direction of Cantex Mine i.e., Cantex Mine and KWG Resources go up and down completely randomly.
Pair Corralation between Cantex Mine and KWG Resources
Assuming the 90 days horizon Cantex Mine is expected to generate 6.75 times less return on investment than KWG Resources. But when comparing it to its historical volatility, Cantex Mine Development is 1.51 times less risky than KWG Resources. It trades about 0.03 of its potential returns per unit of risk. KWG Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.80 in KWG Resources on September 1, 2024 and sell it today you would earn a total of 0.25 from holding KWG Resources or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cantex Mine Development vs. KWG Resources
Performance |
| Timeline |
| Cantex Mine Development |
| KWG Resources |
Cantex Mine and KWG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantex Mine and KWG Resources
The main advantage of trading using opposite Cantex Mine and KWG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantex Mine position performs unexpectedly, KWG 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 KWG Resources will offset losses from the drop in KWG Resources' 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 |
| KWG Resources vs. South32 Limited | KWG Resources vs. NioCorp Developments Ltd | KWG Resources vs. HUMANA INC | KWG Resources vs. SCOR PK |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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