Correlation Between Laramide Resources and Chibougamau Independent
Can any of the company-specific risk be diversified away by investing in both Laramide Resources and Chibougamau Independent 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 Laramide Resources and Chibougamau Independent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laramide Resources and Chibougamau Independent Mines, you can compare the effects of market volatilities on Laramide Resources and Chibougamau Independent 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 Laramide Resources with a short position of Chibougamau Independent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laramide Resources and Chibougamau Independent.
Diversification Opportunities for Laramide Resources and Chibougamau Independent
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Laramide and Chibougamau is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Laramide Resources and Chibougamau Independent Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chibougamau Independent and Laramide 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 Laramide Resources are associated (or correlated) with Chibougamau Independent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chibougamau Independent has no effect on the direction of Laramide Resources i.e., Laramide Resources and Chibougamau Independent go up and down completely randomly.
Pair Corralation between Laramide Resources and Chibougamau Independent
Assuming the 90 days trading horizon Laramide Resources is expected to generate 1.3 times more return on investment than Chibougamau Independent. However, Laramide Resources is 1.3 times more volatile than Chibougamau Independent Mines. It trades about 0.14 of its potential returns per unit of risk. Chibougamau Independent Mines is currently generating about 0.11 per unit of risk. If you would invest 50.00 in Laramide Resources on September 4, 2024 and sell it today you would earn a total of 25.00 from holding Laramide Resources or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laramide Resources vs. Chibougamau Independent Mines
Performance |
| Timeline |
| Laramide Resources |
| Chibougamau Independent |
Laramide Resources and Chibougamau Independent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laramide Resources and Chibougamau Independent
The main advantage of trading using opposite Laramide Resources and Chibougamau Independent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laramide Resources position performs unexpectedly, Chibougamau Independent 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 Chibougamau Independent will offset losses from the drop in Chibougamau Independent's long position.| Laramide Resources vs. Mega Uranium | Laramide Resources vs. Forsys Metals Corp | Laramide Resources vs. Pinetree Capital | Laramide Resources vs. Ur Energy |
| Chibougamau Independent vs. iShares Canadian HYBrid | Chibougamau Independent vs. Altagas Cum Red | Chibougamau Independent vs. European Residential Real | Chibougamau Independent vs. RBC Discount Bond |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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