Correlation Between Globex Mining and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on Globex Mining and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Canlan Ice.
Diversification Opportunities for Globex Mining and Canlan Ice
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and Canlan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Globex Mining i.e., Globex Mining and Canlan Ice go up and down completely randomly.
Pair Corralation between Globex Mining and Canlan Ice
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 1.4 times more return on investment than Canlan Ice. However, Globex Mining is 1.4 times more volatile than Canlan Ice Sports. It trades about 0.05 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.02 per unit of risk. If you would invest 66.00 in Globex Mining Enterprises on September 4, 2024 and sell it today you would earn a total of 43.00 from holding Globex Mining Enterprises or generate 65.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Canlan Ice Sports
Performance |
| Timeline |
| Globex Mining Enterprises |
| Canlan Ice Sports |
Globex Mining and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Canlan Ice
The main advantage of trading using opposite Globex Mining and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Globex Mining vs. First Majestic Silver | Globex Mining vs. Ivanhoe Energy | Globex Mining vs. Orezone Gold Corp | Globex Mining vs. Faraday Copper Corp |
| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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