Correlation Between Imperial Metals and IMetal Resources
Can any of the company-specific risk be diversified away by investing in both Imperial Metals and IMetal 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 Imperial Metals and IMetal Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and iMetal Resources, you can compare the effects of market volatilities on Imperial Metals and IMetal 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 Imperial Metals with a short position of IMetal Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and IMetal Resources.
Diversification Opportunities for Imperial Metals and IMetal Resources
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Imperial and IMetal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and iMetal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iMetal Resources and Imperial 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 Imperial Metals are associated (or correlated) with IMetal Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iMetal Resources has no effect on the direction of Imperial Metals i.e., Imperial Metals and IMetal Resources go up and down completely randomly.
Pair Corralation between Imperial Metals and IMetal Resources
Assuming the 90 days trading horizon Imperial Metals is expected to generate 8.0 times less return on investment than IMetal Resources. But when comparing it to its historical volatility, Imperial Metals is 1.54 times less risky than IMetal Resources. It trades about 0.03 of its potential returns per unit of risk. iMetal Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 20.00 in iMetal Resources on September 2, 2024 and sell it today you would earn a total of 2.00 from holding iMetal Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Imperial Metals vs. iMetal Resources
Performance |
| Timeline |
| Imperial Metals |
| iMetal Resources |
Imperial Metals and IMetal Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and IMetal Resources
The main advantage of trading using opposite Imperial Metals and IMetal Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals position performs unexpectedly, IMetal 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 IMetal Resources will offset losses from the drop in IMetal Resources' long position.| Imperial Metals vs. Taseko Mines | Imperial Metals vs. Mountain Boy Minerals | Imperial Metals vs. iMetal Resources | Imperial Metals vs. Western Copper and |
| IMetal Resources vs. Verizon Communications CDR | IMetal Resources vs. Datable Technology Corp | IMetal Resources vs. CVW CleanTech | IMetal Resources vs. AGF Management Limited |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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