Correlation Between Eskay Mining and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and Huntsman Exploration 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 Huntsman Exploration 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 Huntsman Exploration, you can compare the effects of market volatilities on Eskay Mining and Huntsman Exploration 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 Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and Huntsman Exploration.
Diversification Opportunities for Eskay Mining and Huntsman Exploration
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eskay and Huntsman is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration 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 Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Eskay Mining i.e., Eskay Mining and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Eskay Mining and Huntsman Exploration
Assuming the 90 days horizon Eskay Mining Corp is expected to generate 0.38 times more return on investment than Huntsman Exploration. However, Eskay Mining Corp is 2.63 times less risky than Huntsman Exploration. It trades about -0.17 of its potential returns per unit of risk. Huntsman Exploration is currently generating about -0.21 per unit of risk. If you would invest 12.00 in Eskay Mining Corp on August 29, 2024 and sell it today you would lose (2.24) from holding Eskay Mining Corp or give up 18.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. Huntsman Exploration
Performance |
| Timeline |
| Eskay Mining Corp |
| Huntsman Exploration |
Eskay Mining and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and Huntsman Exploration
The main advantage of trading using opposite Eskay Mining and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Eskay Mining vs. Ascendant Resources | Eskay Mining vs. Cantex Mine Development | Eskay Mining vs. Amarc Resources | Eskay Mining vs. Sterling Metals Corp |
| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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