Correlation Between GALENA MINING and AWILCO DRILLING

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Can any of the company-specific risk be diversified away by investing in both GALENA MINING and AWILCO DRILLING 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 GALENA MINING and AWILCO DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GALENA MINING LTD and AWILCO DRILLING PLC, you can compare the effects of market volatilities on GALENA MINING and AWILCO DRILLING 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 GALENA MINING with a short position of AWILCO DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and AWILCO DRILLING.

Diversification Opportunities for GALENA MINING and AWILCO DRILLING

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GALENA and AWILCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and AWILCO DRILLING PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AWILCO DRILLING PLC and GALENA 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 GALENA MINING LTD are associated (or correlated) with AWILCO DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AWILCO DRILLING PLC has no effect on the direction of GALENA MINING i.e., GALENA MINING and AWILCO DRILLING go up and down completely randomly.

Pair Corralation between GALENA MINING and AWILCO DRILLING

Assuming the 90 days horizon GALENA MINING is expected to generate 42.14 times less return on investment than AWILCO DRILLING. But when comparing it to its historical volatility, GALENA MINING LTD is 2.33 times less risky than AWILCO DRILLING. It trades about 0.0 of its potential returns per unit of risk. AWILCO DRILLING PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  79.00  in AWILCO DRILLING PLC on August 31, 2024 and sell it today you would earn a total of  115.00  from holding AWILCO DRILLING PLC or generate 145.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GALENA MINING LTD  vs.  AWILCO DRILLING PLC

 Performance 
       Timeline  
GALENA MINING LTD 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
AWILCO DRILLING PLC 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in AWILCO DRILLING PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, AWILCO DRILLING may actually be approaching a critical reversion point that can send shares even higher in December 2024.

GALENA MINING and AWILCO DRILLING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GALENA MINING and AWILCO DRILLING

The main advantage of trading using opposite GALENA MINING and AWILCO DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GALENA MINING position performs unexpectedly, AWILCO DRILLING 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 AWILCO DRILLING will offset losses from the drop in AWILCO DRILLING's long position.
The idea behind GALENA MINING LTD and AWILCO DRILLING PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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