Correlation Between Globex Mining and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Champion Bear 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 Globex Mining and Champion Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Champion Bear Resources, you can compare the effects of market volatilities on Globex Mining and Champion Bear 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 Globex Mining with a short position of Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Champion Bear.
Diversification Opportunities for Globex Mining and Champion Bear
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globex and Champion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources and Globex 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 Globex Mining Enterprises are associated (or correlated) with Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Globex Mining i.e., Globex Mining and Champion Bear go up and down completely randomly.
Pair Corralation between Globex Mining and Champion Bear
Assuming the 90 days horizon Globex Mining is expected to generate 9.43 times less return on investment than Champion Bear. But when comparing it to its historical volatility, Globex Mining Enterprises is 11.96 times less risky than Champion Bear. It trades about 0.05 of its potential returns per unit of risk. Champion Bear Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Champion Bear Resources on September 1, 2024 and sell it today you would lose (11.00) from holding Champion Bear Resources or give up 73.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Champion Bear Resources
Performance |
| Timeline |
| Globex Mining Enterprises |
| Champion Bear Resources |
Globex Mining and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Champion Bear
The main advantage of trading using opposite Globex Mining and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| Globex Mining vs. South32 Limited | Globex Mining vs. NioCorp Developments Ltd | Globex Mining vs. HUMANA INC | Globex Mining vs. SCOR PK |
| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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