Correlation Between InZinc Mining and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both InZinc Mining and Stampede Drilling 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 InZinc Mining and Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InZinc Mining and Stampede Drilling, you can compare the effects of market volatilities on InZinc Mining and Stampede Drilling 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 InZinc Mining with a short position of Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of InZinc Mining and Stampede Drilling.
Diversification Opportunities for InZinc Mining and Stampede Drilling
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between InZinc and Stampede is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding InZinc Mining and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and InZinc Mining 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 InZinc Mining are associated (or correlated) with Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of InZinc Mining i.e., InZinc Mining and Stampede Drilling go up and down completely randomly.
Pair Corralation between InZinc Mining and Stampede Drilling
Assuming the 90 days horizon InZinc Mining is expected to generate 1.15 times more return on investment than Stampede Drilling. However, InZinc Mining is 1.15 times more volatile than Stampede Drilling. It trades about 0.09 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.01 per unit of risk. If you would invest 61.00 in InZinc Mining on December 5, 2024 and sell it today you would earn a total of 26.00 from holding InZinc Mining or generate 42.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InZinc Mining vs. Stampede Drilling
Performance |
| Timeline |
| InZinc Mining |
| Stampede Drilling |
InZinc Mining and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InZinc Mining and Stampede Drilling
The main advantage of trading using opposite InZinc Mining and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InZinc Mining position performs unexpectedly, Stampede Drilling 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 Stampede Drilling will offset losses from the drop in Stampede Drilling's long position.| InZinc Mining vs. Brunswick Exploration | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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