Correlation Between Edison Cobalt and Cantex Mine
Can any of the company-specific risk be diversified away by investing in both Edison Cobalt and Cantex Mine 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 Edison Cobalt and Cantex Mine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edison Cobalt Corp and Cantex Mine Development, you can compare the effects of market volatilities on Edison Cobalt and Cantex Mine 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 Edison Cobalt with a short position of Cantex Mine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edison Cobalt and Cantex Mine.
Diversification Opportunities for Edison Cobalt and Cantex Mine
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edison and Cantex is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Edison Cobalt Corp and Cantex Mine Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantex Mine Development and Edison Cobalt 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 Edison Cobalt Corp are associated (or correlated) with Cantex Mine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantex Mine Development has no effect on the direction of Edison Cobalt i.e., Edison Cobalt and Cantex Mine go up and down completely randomly.
Pair Corralation between Edison Cobalt and Cantex Mine
Assuming the 90 days horizon Edison Cobalt Corp is expected to generate 0.36 times more return on investment than Cantex Mine. However, Edison Cobalt Corp is 2.82 times less risky than Cantex Mine. It trades about -0.17 of its potential returns per unit of risk. Cantex Mine Development is currently generating about -0.15 per unit of risk. If you would invest 7.93 in Edison Cobalt Corp on August 24, 2024 and sell it today you would lose (1.03) from holding Edison Cobalt Corp or give up 12.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edison Cobalt Corp vs. Cantex Mine Development
Performance |
| Timeline |
| Edison Cobalt Corp |
| Cantex Mine Development |
Edison Cobalt and Cantex Mine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edison Cobalt and Cantex Mine
The main advantage of trading using opposite Edison Cobalt and Cantex Mine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edison Cobalt position performs unexpectedly, Cantex Mine 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 Cantex Mine will offset losses from the drop in Cantex Mine's long position.| Edison Cobalt vs. Baroyeca Gold Silver | Edison Cobalt vs. Aurelia Metals Limited | Edison Cobalt vs. China Rare Earth | Edison Cobalt vs. Champion Bear Resources |
| Cantex Mine vs. Norra Metals Corp | Cantex Mine vs. Amarc Resources | Cantex Mine vs. ZincX Resources Corp | Cantex Mine vs. Nuinsco Resources Limited |
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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