Correlation Between Midnight Sun and Elcora Advanced
Can any of the company-specific risk be diversified away by investing in both Midnight Sun and Elcora Advanced 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 Midnight Sun and Elcora Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midnight Sun Mining and Elcora Advanced Materials, you can compare the effects of market volatilities on Midnight Sun and Elcora Advanced 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 Midnight Sun with a short position of Elcora Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midnight Sun and Elcora Advanced.
Diversification Opportunities for Midnight Sun and Elcora Advanced
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Midnight and Elcora is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Midnight Sun Mining and Elcora Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcora Advanced Materials and Midnight Sun 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 Midnight Sun Mining are associated (or correlated) with Elcora Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcora Advanced Materials has no effect on the direction of Midnight Sun i.e., Midnight Sun and Elcora Advanced go up and down completely randomly.
Pair Corralation between Midnight Sun and Elcora Advanced
Assuming the 90 days horizon Midnight Sun Mining is expected to generate 0.74 times more return on investment than Elcora Advanced. However, Midnight Sun Mining is 1.35 times less risky than Elcora Advanced. It trades about 0.05 of its potential returns per unit of risk. Elcora Advanced Materials is currently generating about 0.02 per unit of risk. If you would invest 40.00 in Midnight Sun Mining on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Midnight Sun Mining or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Midnight Sun Mining vs. Elcora Advanced Materials
Performance |
| Timeline |
| Midnight Sun Mining |
| Elcora Advanced Materials |
Midnight Sun and Elcora Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midnight Sun and Elcora Advanced
The main advantage of trading using opposite Midnight Sun and Elcora Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midnight Sun position performs unexpectedly, Elcora Advanced 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 Elcora Advanced will offset losses from the drop in Elcora Advanced's long position.| Midnight Sun vs. New Destiny Mining | Midnight Sun vs. Magnum Goldcorp | Midnight Sun vs. Asiabasemetals | Midnight Sun vs. Lupaka Gold Corp |
| Elcora Advanced vs. Algoma Steel Group | Elcora Advanced vs. Champion Iron | Elcora Advanced vs. International Zeolite Corp | Elcora Advanced vs. European Residential Real |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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