Correlation Between Pure Energy and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Pure Energy and Champion Bear 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 Pure Energy and Champion Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Energy Minerals and Champion Bear Resources, you can compare the effects of market volatilities on Pure Energy and Champion Bear 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 Pure Energy with a short position of Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Energy and Champion Bear.
Diversification Opportunities for Pure Energy and Champion Bear
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pure and Champion is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Pure Energy Minerals and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources and Pure Energy 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 Pure Energy Minerals are associated (or correlated) with Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Pure Energy i.e., Pure Energy and Champion Bear go up and down completely randomly.
Pair Corralation between Pure Energy and Champion Bear
Given the investment horizon of 90 days Pure Energy is expected to generate 24.44 times less return on investment than Champion Bear. But when comparing it to its historical volatility, Pure Energy Minerals is 2.95 times less risky than Champion Bear. It trades about 0.01 of its potential returns per unit of risk. Champion Bear Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Champion Bear Resources on September 3, 2024 and sell it today you would lose (3.00) from holding Champion Bear Resources or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Pure Energy Minerals vs. Champion Bear Resources
Performance |
| Timeline |
| Pure Energy Minerals |
| Champion Bear Resources |
Pure Energy and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Energy and Champion Bear
The main advantage of trading using opposite Pure Energy and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Energy position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| Pure Energy vs. Algoma Steel Group | Pure Energy vs. Champion Iron | Pure Energy vs. International Zeolite Corp | Pure Energy vs. European Residential Real |
| Champion Bear vs. Toronto Dominion Bank | Champion Bear vs. Intact Financial Corp | Champion Bear vs. Orbit Garant Drilling | Champion Bear vs. IGM Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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