Correlation Between Kiplin Metals and Searchlight Resources
Can any of the company-specific risk be diversified away by investing in both Kiplin Metals and Searchlight 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 Kiplin Metals and Searchlight Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiplin Metals and Searchlight Resources, you can compare the effects of market volatilities on Kiplin Metals and Searchlight 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 Kiplin Metals with a short position of Searchlight Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiplin Metals and Searchlight Resources.
Diversification Opportunities for Kiplin Metals and Searchlight Resources
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kiplin and Searchlight is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kiplin Metals and Searchlight Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Searchlight Resources and Kiplin 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 Kiplin Metals are associated (or correlated) with Searchlight Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Searchlight Resources has no effect on the direction of Kiplin Metals i.e., Kiplin Metals and Searchlight Resources go up and down completely randomly.
Pair Corralation between Kiplin Metals and Searchlight Resources
Assuming the 90 days horizon Kiplin Metals is expected to generate 10.08 times less return on investment than Searchlight Resources. But when comparing it to its historical volatility, Kiplin Metals is 3.85 times less risky than Searchlight Resources. It trades about 0.04 of its potential returns per unit of risk. Searchlight Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Searchlight Resources on September 2, 2024 and sell it today you would lose (0.50) from holding Searchlight Resources or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Kiplin Metals vs. Searchlight Resources
Performance |
| Timeline |
| Kiplin Metals |
| Searchlight Resources |
Kiplin Metals and Searchlight Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiplin Metals and Searchlight Resources
The main advantage of trading using opposite Kiplin Metals and Searchlight Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiplin Metals position performs unexpectedly, Searchlight 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 Searchlight Resources will offset losses from the drop in Searchlight Resources' long position.| Kiplin Metals vs. First Majestic Silver | Kiplin Metals vs. Ivanhoe Energy | Kiplin Metals vs. Orezone Gold Corp |
| Searchlight Resources vs. Kiplin Metals | Searchlight Resources vs. Noram Lithium Corp | Searchlight Resources vs. Minnova 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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