Correlation Between Happy Creek and Bold Ventures
Can any of the company-specific risk be diversified away by investing in both Happy Creek and Bold Ventures 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 Happy Creek and Bold Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Happy Creek Minerals and Bold Ventures, you can compare the effects of market volatilities on Happy Creek and Bold Ventures 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 Happy Creek with a short position of Bold Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Happy Creek and Bold Ventures.
Diversification Opportunities for Happy Creek and Bold Ventures
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Happy and Bold is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Happy Creek Minerals and Bold Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bold Ventures and Happy Creek 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 Happy Creek Minerals are associated (or correlated) with Bold Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bold Ventures has no effect on the direction of Happy Creek i.e., Happy Creek and Bold Ventures go up and down completely randomly.
Pair Corralation between Happy Creek and Bold Ventures
Assuming the 90 days horizon Happy Creek Minerals is expected to generate 1.15 times more return on investment than Bold Ventures. However, Happy Creek is 1.15 times more volatile than Bold Ventures. It trades about 0.04 of its potential returns per unit of risk. Bold Ventures is currently generating about 0.03 per unit of risk. If you would invest 5.00 in Happy Creek Minerals on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Happy Creek Minerals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Happy Creek Minerals vs. Bold Ventures
Performance |
| Timeline |
| Happy Creek Minerals |
| Bold Ventures |
Happy Creek and Bold Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Happy Creek and Bold Ventures
The main advantage of trading using opposite Happy Creek and Bold Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Happy Creek position performs unexpectedly, Bold Ventures 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 Bold Ventures will offset losses from the drop in Bold Ventures' long position.| Happy Creek vs. High Liner Foods | Happy Creek vs. Millennium Silver Corp | Happy Creek vs. Maple Leaf Foods | Happy Creek vs. Economic Investment Trust |
| Bold Ventures vs. First National Financial | Bold Ventures vs. Ramp Metals | Bold Ventures vs. Canadian Imperial Bank | Bold Ventures vs. Brookfield Office 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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