Correlation Between Eskay Mining and Materion
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and Materion 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 Materion 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 Materion, you can compare the effects of market volatilities on Eskay Mining and Materion 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 Materion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and Materion.
Diversification Opportunities for Eskay Mining and Materion
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eskay and Materion is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and Materion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materion 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 Materion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materion has no effect on the direction of Eskay Mining i.e., Eskay Mining and Materion go up and down completely randomly.
Pair Corralation between Eskay Mining and Materion
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the Materion. In addition to that, Eskay Mining is 1.71 times more volatile than Materion. It trades about -0.17 of its total potential returns per unit of risk. Materion is currently generating about 0.17 per unit of volatility. If you would invest 10,446 in Materion on August 29, 2024 and sell it today you would earn a total of 1,088 from holding Materion or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. Materion
Performance |
| Timeline |
| Eskay Mining Corp |
| Materion |
Eskay Mining and Materion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and Materion
The main advantage of trading using opposite Eskay Mining and Materion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, Materion 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 Materion will offset losses from the drop in Materion'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 |
| Materion vs. Skeena Resources | Materion vs. Compass Minerals International | Materion vs. IperionX Limited American | Materion vs. EMX Royalty Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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