Correlation Between Canadian Palladium and Stelmine Canada
Can any of the company-specific risk be diversified away by investing in both Canadian Palladium and Stelmine Canada 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 Stelmine Canada 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 Stelmine Canada, you can compare the effects of market volatilities on Canadian Palladium and Stelmine Canada 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 Stelmine Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Palladium and Stelmine Canada.
Diversification Opportunities for Canadian Palladium and Stelmine Canada
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canadian and Stelmine is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Palladium Resources and Stelmine Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelmine Canada 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 Stelmine Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelmine Canada has no effect on the direction of Canadian Palladium i.e., Canadian Palladium and Stelmine Canada go up and down completely randomly.
Pair Corralation between Canadian Palladium and Stelmine Canada
Assuming the 90 days horizon Canadian Palladium Resources is expected to under-perform the Stelmine Canada. In addition to that, Canadian Palladium is 1.1 times more volatile than Stelmine Canada. It trades about -0.06 of its total potential returns per unit of risk. Stelmine Canada is currently generating about 0.0 per unit of volatility. If you would invest 1.21 in Stelmine Canada on September 4, 2024 and sell it today you would lose (0.13) from holding Stelmine Canada or give up 10.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Palladium Resources vs. Stelmine Canada
Performance |
| Timeline |
| Canadian Palladium |
| Stelmine Canada |
Canadian Palladium and Stelmine Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Palladium and Stelmine Canada
The main advantage of trading using opposite Canadian Palladium and Stelmine Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Palladium position performs unexpectedly, Stelmine Canada 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 Stelmine Canada will offset losses from the drop in Stelmine Canada'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 |
| Stelmine Canada vs. Fury Gold Mines | Stelmine Canada vs. Ivanhoe Mines | Stelmine Canada vs. Americas Silver Corp | Stelmine Canada vs. StrikePoint Gold |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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