Correlation Between Hannan Metals and Golden Arrow
Can any of the company-specific risk be diversified away by investing in both Hannan Metals and Golden Arrow 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 Hannan Metals and Golden Arrow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannan Metals and Golden Arrow Resources, you can compare the effects of market volatilities on Hannan Metals and Golden Arrow 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 Hannan Metals with a short position of Golden Arrow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannan Metals and Golden Arrow.
Diversification Opportunities for Hannan Metals and Golden Arrow
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hannan and Golden is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hannan Metals and Golden Arrow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Arrow Resources and Hannan Metals 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 Hannan Metals are associated (or correlated) with Golden Arrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Arrow Resources has no effect on the direction of Hannan Metals i.e., Hannan Metals and Golden Arrow go up and down completely randomly.
Pair Corralation between Hannan Metals and Golden Arrow
Assuming the 90 days horizon Hannan Metals is expected to generate 0.65 times more return on investment than Golden Arrow. However, Hannan Metals is 1.53 times less risky than Golden Arrow. It trades about 0.12 of its potential returns per unit of risk. Golden Arrow Resources is currently generating about 0.01 per unit of risk. If you would invest 34.00 in Hannan Metals on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Hannan Metals or generate 79.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannan Metals vs. Golden Arrow Resources
Performance |
| Timeline |
| Hannan Metals |
| Golden Arrow Resources |
Hannan Metals and Golden Arrow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannan Metals and Golden Arrow
The main advantage of trading using opposite Hannan Metals and Golden Arrow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannan Metals position performs unexpectedly, Golden Arrow 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 Golden Arrow will offset losses from the drop in Golden Arrow's long position.| Hannan Metals vs. Algoma Steel Group | Hannan Metals vs. Champion Iron | Hannan Metals vs. International Zeolite Corp | Hannan Metals vs. European Residential Real |
| Golden Arrow vs. Orex Minerals | Golden Arrow vs. Avrupa Minerals | Golden Arrow vs. Rockhaven Resources | Golden Arrow vs. Hannan Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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