Correlation Between Canadian Palladium and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Canadian Palladium and Champion Bear 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 Canadian Palladium and Champion Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Palladium Resources and Champion Bear Resources, you can compare the effects of market volatilities on Canadian Palladium and Champion Bear 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 Canadian Palladium with a short position of Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Palladium and Champion Bear.
Diversification Opportunities for Canadian Palladium and Champion Bear
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Champion is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Palladium Resources and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources and Canadian Palladium 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 Canadian Palladium Resources are associated (or correlated) with Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Canadian Palladium i.e., Canadian Palladium and Champion Bear go up and down completely randomly.
Pair Corralation between Canadian Palladium and Champion Bear
Assuming the 90 days horizon Canadian Palladium Resources is expected to under-perform the Champion Bear. But the pink sheet apears to be less risky and, when comparing its historical volatility, Canadian Palladium Resources is 5.23 times less risky than Champion Bear. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Champion Bear Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Champion Bear Resources on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Champion Bear Resources or generate 300.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Palladium Resources vs. Champion Bear Resources
Performance |
| Timeline |
| Canadian Palladium |
| Champion Bear Resources |
Canadian Palladium and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Palladium and Champion Bear
The main advantage of trading using opposite Canadian Palladium and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Palladium position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| Canadian Palladium vs. Qubec Nickel Corp | Canadian Palladium vs. IGO Limited | Canadian Palladium vs. Avarone Metals | Canadian Palladium vs. Adriatic Metals PLC |
| Champion Bear vs. Qubec Nickel Corp | Champion Bear vs. IGO Limited | Champion Bear vs. Avarone Metals | Champion Bear vs. Adriatic Metals PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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