Correlation Between Diamcor Mining and New Pacific
Can any of the company-specific risk be diversified away by investing in both Diamcor Mining and New Pacific 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 Diamcor Mining and New Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamcor Mining and New Pacific Metals, you can compare the effects of market volatilities on Diamcor Mining and New Pacific 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 Diamcor Mining with a short position of New Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamcor Mining and New Pacific.
Diversification Opportunities for Diamcor Mining and New Pacific
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diamcor and New is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Diamcor Mining and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals and Diamcor Mining 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 Diamcor Mining are associated (or correlated) with New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of Diamcor Mining i.e., Diamcor Mining and New Pacific go up and down completely randomly.
Pair Corralation between Diamcor Mining and New Pacific
Assuming the 90 days horizon Diamcor Mining is expected to generate 2.28 times more return on investment than New Pacific. However, Diamcor Mining is 2.28 times more volatile than New Pacific Metals. It trades about 0.01 of its potential returns per unit of risk. New Pacific Metals is currently generating about -0.01 per unit of risk. If you would invest 8.00 in Diamcor Mining on August 29, 2024 and sell it today you would lose (5.90) from holding Diamcor Mining or give up 73.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamcor Mining vs. New Pacific Metals
Performance |
| Timeline |
| Diamcor Mining |
| New Pacific Metals |
Diamcor Mining and New Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamcor Mining and New Pacific
The main advantage of trading using opposite Diamcor Mining and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamcor Mining position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's long position.| Diamcor Mining vs. New Pacific Metals | Diamcor Mining vs. Star Royalties | Diamcor Mining vs. Teuton Resources Corp |
| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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