Correlation Between Adamera Minerals and CMC Metals
Can any of the company-specific risk be diversified away by investing in both Adamera Minerals and CMC Metals 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 Adamera Minerals and CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adamera Minerals Corp and CMC Metals, you can compare the effects of market volatilities on Adamera Minerals and CMC Metals 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 Adamera Minerals with a short position of CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adamera Minerals and CMC Metals.
Diversification Opportunities for Adamera Minerals and CMC Metals
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adamera and CMC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Adamera Minerals Corp and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals and Adamera Minerals 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 Adamera Minerals Corp are associated (or correlated) with CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of Adamera Minerals i.e., Adamera Minerals and CMC Metals go up and down completely randomly.
Pair Corralation between Adamera Minerals and CMC Metals
Assuming the 90 days horizon Adamera Minerals Corp is expected to under-perform the CMC Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adamera Minerals Corp is 2.06 times less risky than CMC Metals. The pink sheet trades about -0.01 of its potential returns per unit of risk. The CMC Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 18.00 in CMC Metals on September 4, 2024 and sell it today you would lose (16.41) from holding CMC Metals or give up 91.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.51% |
| Values | Daily Returns |
Adamera Minerals Corp vs. CMC Metals
Performance |
| Timeline |
| Adamera Minerals Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CMC Metals |
Adamera Minerals and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adamera Minerals and CMC Metals
The main advantage of trading using opposite Adamera Minerals and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adamera Minerals position performs unexpectedly, CMC Metals 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 CMC Metals will offset losses from the drop in CMC Metals' long position.| Adamera Minerals vs. Cartier Iron Corp | Adamera Minerals vs. Arctic Star Exploration | Adamera Minerals vs. Capella Minerals Limited | Adamera Minerals vs. Denarius Silver Corp |
| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Gatos Silver |
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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