Correlation Between Grid Metals and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Grid Metals and Surge Copper 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 Grid Metals and Surge Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grid Metals Corp and Surge Copper Corp, you can compare the effects of market volatilities on Grid Metals and Surge Copper 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 Grid Metals with a short position of Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grid Metals and Surge Copper.
Diversification Opportunities for Grid Metals and Surge Copper
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grid and Surge is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grid Metals Corp and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp and Grid 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 Grid Metals Corp are associated (or correlated) with Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Grid Metals i.e., Grid Metals and Surge Copper go up and down completely randomly.
Pair Corralation between Grid Metals and Surge Copper
Assuming the 90 days horizon Grid Metals Corp is expected to under-perform the Surge Copper. In addition to that, Grid Metals is 1.32 times more volatile than Surge Copper Corp. It trades about -0.06 of its total potential returns per unit of risk. Surge Copper Corp is currently generating about -0.07 per unit of volatility. If you would invest 14.00 in Surge Copper Corp on September 1, 2024 and sell it today you would lose (7.11) from holding Surge Copper Corp or give up 50.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Grid Metals Corp vs. Surge Copper Corp
Performance |
| Timeline |
| Grid Metals Corp |
| Surge Copper Corp |
Grid Metals and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grid Metals and Surge Copper
The main advantage of trading using opposite Grid Metals and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grid Metals position performs unexpectedly, Surge Copper 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 Surge Copper will offset losses from the drop in Surge Copper's long position.The idea behind Grid Metals Corp and Surge Copper Corp 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.| Surge Copper vs. Pampa Metals | Surge Copper vs. Progressive Planet Solutions | Surge Copper vs. Searchlight Resources | Surge Copper vs. Durango Resources |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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