Correlation Between Hummingbird Resources and Jaguar Mining
Can any of the company-specific risk be diversified away by investing in both Hummingbird Resources and Jaguar Mining 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 Hummingbird Resources and Jaguar Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hummingbird Resources PLC and Jaguar Mining, you can compare the effects of market volatilities on Hummingbird Resources and Jaguar Mining 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 Hummingbird Resources with a short position of Jaguar Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hummingbird Resources and Jaguar Mining.
Diversification Opportunities for Hummingbird Resources and Jaguar Mining
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hummingbird and Jaguar is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hummingbird Resources PLC and Jaguar Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Mining and Hummingbird Resources 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 Hummingbird Resources PLC are associated (or correlated) with Jaguar Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Mining has no effect on the direction of Hummingbird Resources i.e., Hummingbird Resources and Jaguar Mining go up and down completely randomly.
Pair Corralation between Hummingbird Resources and Jaguar Mining
Assuming the 90 days horizon Hummingbird Resources PLC is expected to under-perform the Jaguar Mining. In addition to that, Hummingbird Resources is 4.91 times more volatile than Jaguar Mining. It trades about -0.23 of its total potential returns per unit of risk. Jaguar Mining is currently generating about -0.21 per unit of volatility. If you would invest 322.00 in Jaguar Mining on September 1, 2024 and sell it today you would lose (53.00) from holding Jaguar Mining or give up 16.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hummingbird Resources PLC vs. Jaguar Mining
Performance |
| Timeline |
| Hummingbird Resources PLC |
| Jaguar Mining |
Hummingbird Resources and Jaguar Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hummingbird Resources and Jaguar Mining
The main advantage of trading using opposite Hummingbird Resources and Jaguar Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hummingbird Resources position performs unexpectedly, Jaguar Mining 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 Jaguar Mining will offset losses from the drop in Jaguar Mining's long position.| Hummingbird Resources vs. Fremont Gold | Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold Corp |
| Jaguar Mining vs. South32 Limited | Jaguar Mining vs. NioCorp Developments Ltd | Jaguar Mining vs. HUMANA INC | Jaguar Mining vs. SCOR PK |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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