Correlation Between New Pacific and Scottie Resources
Can any of the company-specific risk be diversified away by investing in both New Pacific and Scottie Resources 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 New Pacific and Scottie Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Pacific Metals and Scottie Resources Corp, you can compare the effects of market volatilities on New Pacific and Scottie Resources 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 New Pacific with a short position of Scottie Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Pacific and Scottie Resources.
Diversification Opportunities for New Pacific and Scottie Resources
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Scottie is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals and Scottie Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottie Resources Corp and New Pacific 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 New Pacific Metals are associated (or correlated) with Scottie Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottie Resources Corp has no effect on the direction of New Pacific i.e., New Pacific and Scottie Resources go up and down completely randomly.
Pair Corralation between New Pacific and Scottie Resources
Given the investment horizon of 90 days New Pacific Metals is expected to generate 0.38 times more return on investment than Scottie Resources. However, New Pacific Metals is 2.67 times less risky than Scottie Resources. It trades about 0.06 of its potential returns per unit of risk. Scottie Resources Corp is currently generating about -0.03 per unit of risk. If you would invest 147.00 in New Pacific Metals on September 14, 2024 and sell it today you would earn a total of 5.00 from holding New Pacific Metals or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Pacific Metals vs. Scottie Resources Corp
Performance |
| Timeline |
| New Pacific Metals |
| Scottie Resources Corp |
New Pacific and Scottie Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Pacific and Scottie Resources
The main advantage of trading using opposite New Pacific and Scottie Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific position performs unexpectedly, Scottie Resources 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 Scottie Resources will offset losses from the drop in Scottie Resources' long position.| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos Silver |
| Scottie Resources vs. Gold79 Mines | Scottie Resources vs. Arctic Star Exploration | Scottie Resources vs. Arras Minerals Corp | Scottie Resources vs. American Creek 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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