Correlation Between Norra Metals and Granite Creek
Can any of the company-specific risk be diversified away by investing in both Norra Metals and Granite Creek 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 Norra Metals and Granite Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norra Metals Corp and Granite Creek Copper, you can compare the effects of market volatilities on Norra Metals and Granite Creek 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 Norra Metals with a short position of Granite Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norra Metals and Granite Creek.
Diversification Opportunities for Norra Metals and Granite Creek
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norra and Granite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Norra Metals Corp and Granite Creek Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Creek Copper and Norra 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 Norra Metals Corp are associated (or correlated) with Granite Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Creek Copper has no effect on the direction of Norra Metals i.e., Norra Metals and Granite Creek go up and down completely randomly.
Pair Corralation between Norra Metals and Granite Creek
Assuming the 90 days horizon Norra Metals Corp is expected to generate 8.5 times more return on investment than Granite Creek. However, Norra Metals is 8.5 times more volatile than Granite Creek Copper. It trades about 0.07 of its potential returns per unit of risk. Granite Creek Copper is currently generating about 0.02 per unit of risk. If you would invest 1.70 in Norra Metals Corp on August 29, 2024 and sell it today you would lose (0.70) from holding Norra Metals Corp or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norra Metals Corp vs. Granite Creek Copper
Performance |
| Timeline |
| Norra Metals Corp |
| Granite Creek Copper |
Norra Metals and Granite Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norra Metals and Granite Creek
The main advantage of trading using opposite Norra Metals and Granite Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norra Metals position performs unexpectedly, Granite Creek 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 Granite Creek will offset losses from the drop in Granite Creek's long position.| Norra Metals vs. Elmos Semiconductor SE | Norra Metals vs. IPG Photonics | Norra Metals vs. Microchip Technology | Norra Metals vs. Analog Devices |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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