Correlation Between Infinico Metals and Newport Exploration
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and Newport Exploration 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 Infinico Metals and Newport Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinico Metals Corp and Newport Exploration, you can compare the effects of market volatilities on Infinico Metals and Newport Exploration 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 Infinico Metals with a short position of Newport Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and Newport Exploration.
Diversification Opportunities for Infinico Metals and Newport Exploration
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infinico and Newport is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Newport Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newport Exploration and Infinico 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 Infinico Metals Corp are associated (or correlated) with Newport Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newport Exploration has no effect on the direction of Infinico Metals i.e., Infinico Metals and Newport Exploration go up and down completely randomly.
Pair Corralation between Infinico Metals and Newport Exploration
Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 1.35 times more return on investment than Newport Exploration. However, Infinico Metals is 1.35 times more volatile than Newport Exploration. It trades about -0.09 of its potential returns per unit of risk. Newport Exploration is currently generating about -0.19 per unit of risk. If you would invest 3.00 in Infinico Metals Corp on August 29, 2024 and sell it today you would lose (1.00) from holding Infinico Metals Corp or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.86% |
| Values | Daily Returns |
Infinico Metals Corp vs. Newport Exploration
Performance |
| Timeline |
| Infinico Metals Corp |
| Newport Exploration |
Infinico Metals and Newport Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and Newport Exploration
The main advantage of trading using opposite Infinico Metals and Newport Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, Newport Exploration 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 Newport Exploration will offset losses from the drop in Newport Exploration's long position.| Infinico Metals vs. Rubicon Organics | Infinico Metals vs. T2 Metals Corp | Infinico Metals vs. Maple Leaf Foods | Infinico Metals vs. Intact Financial Corp |
| Newport Exploration vs. First Majestic Silver | Newport Exploration vs. Ivanhoe Energy | Newport Exploration vs. Orezone Gold Corp | Newport Exploration vs. Faraday Copper 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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