Correlation Between Eskay Mining and Kiplin Metals
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and Kiplin 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 Eskay Mining and Kiplin Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eskay Mining Corp and Kiplin Metals, you can compare the effects of market volatilities on Eskay Mining and Kiplin 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 Eskay Mining with a short position of Kiplin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and Kiplin Metals.
Diversification Opportunities for Eskay Mining and Kiplin Metals
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eskay and Kiplin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and Kiplin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiplin Metals and Eskay 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 Eskay Mining Corp are associated (or correlated) with Kiplin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiplin Metals has no effect on the direction of Eskay Mining i.e., Eskay Mining and Kiplin Metals go up and down completely randomly.
Pair Corralation between Eskay Mining and Kiplin Metals
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the Kiplin Metals. But the stock apears to be less risky and, when comparing its historical volatility, Eskay Mining Corp is 1.21 times less risky than Kiplin Metals. The stock trades about -0.05 of its potential returns per unit of risk. The Kiplin Metals is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Kiplin Metals on September 3, 2024 and sell it today you would lose (12.00) from holding Kiplin Metals or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. Kiplin Metals
Performance |
| Timeline |
| Eskay Mining Corp |
| Kiplin Metals |
Eskay Mining and Kiplin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and Kiplin Metals
The main advantage of trading using opposite Eskay Mining and Kiplin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, Kiplin 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 Kiplin Metals will offset losses from the drop in Kiplin Metals' long position.| Eskay Mining vs. Grande Portage Resources | Eskay Mining vs. Strikepoint Gold | Eskay Mining vs. Blackrock Silver Corp | Eskay Mining vs. American Creek Resources |
| Kiplin Metals vs. Algoma Steel Group | Kiplin Metals vs. Champion Iron | Kiplin Metals vs. International Zeolite Corp | Kiplin Metals vs. European Residential Real |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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