Correlation Between Mineral Res and Huntsman Exploration

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mineral Res and Huntsman 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 Mineral Res and Huntsman Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mineral Res and Huntsman Exploration, you can compare the effects of market volatilities on Mineral Res and Huntsman 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 Mineral Res with a short position of Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineral Res and Huntsman Exploration.

Diversification Opportunities for Mineral Res and Huntsman Exploration

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Mineral and Huntsman is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Res and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration and Mineral Res 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 Mineral Res are associated (or correlated) with Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Mineral Res i.e., Mineral Res and Huntsman Exploration go up and down completely randomly.

Pair Corralation between Mineral Res and Huntsman Exploration

Assuming the 90 days horizon Mineral Res is expected to under-perform the Huntsman Exploration. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mineral Res is 10.83 times less risky than Huntsman Exploration. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Huntsman Exploration is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Huntsman Exploration on September 14, 2024 and sell it today you would earn a total of  0.40  from holding Huntsman Exploration or generate 20.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Mineral Res  vs.  Huntsman Exploration

 Performance 
       Timeline  
Mineral Res 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mineral Res has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mineral Res is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Huntsman Exploration 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Huntsman Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Mineral Res and Huntsman Exploration Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mineral Res and Huntsman Exploration

The main advantage of trading using opposite Mineral Res and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Res position performs unexpectedly, Huntsman 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.
The idea behind Mineral Res and Huntsman Exploration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Transaction History
View history of all your transactions and understand their impact on performance