Correlation Between Stans Energy and Power Metals
Can any of the company-specific risk be diversified away by investing in both Stans Energy and Power Metals 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 Stans Energy and Power Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stans Energy Corp and Power Metals Corp, you can compare the effects of market volatilities on Stans Energy and Power Metals 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 Stans Energy with a short position of Power Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stans Energy and Power Metals.
Diversification Opportunities for Stans Energy and Power Metals
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stans and Power is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stans Energy Corp and Power Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metals Corp and Stans Energy 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 Stans Energy Corp are associated (or correlated) with Power Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metals Corp has no effect on the direction of Stans Energy i.e., Stans Energy and Power Metals go up and down completely randomly.
Pair Corralation between Stans Energy and Power Metals
Assuming the 90 days horizon Stans Energy Corp is expected to under-perform the Power Metals. In addition to that, Stans Energy is 5.56 times more volatile than Power Metals Corp. It trades about -0.02 of its total potential returns per unit of risk. Power Metals Corp is currently generating about -0.03 per unit of volatility. If you would invest 29.00 in Power Metals Corp on August 29, 2024 and sell it today you would lose (2.00) from holding Power Metals Corp or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Stans Energy Corp vs. Power Metals Corp
Performance |
| Timeline |
| Stans Energy Corp |
| Power Metals Corp |
Stans Energy and Power Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stans Energy and Power Metals
The main advantage of trading using opposite Stans Energy and Power Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stans Energy position performs unexpectedly, Power Metals 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 Power Metals will offset losses from the drop in Power Metals' long position.| Stans Energy vs. Silver Hammer Mining | Stans Energy vs. Reyna Silver Corp | Stans Energy vs. Guanajuato Silver | Stans Energy vs. Silver One Resources |
| Power Metals vs. GoMgA Resources | Power Metals vs. Infinite Ore Corp | Power Metals vs. FPX Nickel Corp | Power Metals vs. International Lithium 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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