Correlation Between Globex Mining and Waseco Resources
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Waseco Resources 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 Waseco Resources 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 Waseco Resources, you can compare the effects of market volatilities on Globex Mining and Waseco Resources 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 Waseco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Waseco Resources.
Diversification Opportunities for Globex Mining and Waseco Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and Waseco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Waseco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waseco 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 Waseco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waseco Resources has no effect on the direction of Globex Mining i.e., Globex Mining and Waseco Resources go up and down completely randomly.
Pair Corralation between Globex Mining and Waseco Resources
Assuming the 90 days trading horizon Globex Mining is expected to generate 1.74 times less return on investment than Waseco Resources. But when comparing it to its historical volatility, Globex Mining Enterprises is 5.37 times less risky than Waseco Resources. It trades about 0.19 of its potential returns per unit of risk. Waseco Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Waseco Resources on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Waseco Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Waseco Resources
Performance |
| Timeline |
| Globex Mining Enterprises |
| Waseco Resources |
Globex Mining and Waseco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Waseco Resources
The main advantage of trading using opposite Globex Mining and Waseco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Waseco Resources 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 Waseco Resources will offset losses from the drop in Waseco Resources' 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 |
| Waseco Resources vs. Millennium Silver Corp | Waseco Resources vs. Nicola Mining | Waseco Resources vs. Globex Mining Enterprises | Waseco Resources vs. Capstone Mining 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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