Correlation Between Group Ten and Prime Mining
Can any of the company-specific risk be diversified away by investing in both Group Ten and Prime Mining 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 Group Ten and Prime Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group Ten Metals and Prime Mining Corp, you can compare the effects of market volatilities on Group Ten and Prime Mining 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 Group Ten with a short position of Prime Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group Ten and Prime Mining.
Diversification Opportunities for Group Ten and Prime Mining
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Group and Prime is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Group Ten Metals and Prime Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Mining Corp and Group Ten 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 Group Ten Metals are associated (or correlated) with Prime Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Mining Corp has no effect on the direction of Group Ten i.e., Group Ten and Prime Mining go up and down completely randomly.
Pair Corralation between Group Ten and Prime Mining
Assuming the 90 days horizon Group Ten Metals is expected to under-perform the Prime Mining. But the otc stock apears to be less risky and, when comparing its historical volatility, Group Ten Metals is 1.1 times less risky than Prime Mining. The otc stock trades about -0.14 of its potential returns per unit of risk. The Prime Mining Corp is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Prime Mining Corp on September 1, 2024 and sell it today you would lose (30.00) from holding Prime Mining Corp or give up 21.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group Ten Metals vs. Prime Mining Corp
Performance |
| Timeline |
| Group Ten Metals |
| Prime Mining Corp |
Group Ten and Prime Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group Ten and Prime Mining
The main advantage of trading using opposite Group Ten and Prime Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group Ten position performs unexpectedly, Prime Mining 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 Prime Mining will offset losses from the drop in Prime Mining's long position.| Group Ten vs. Ascendant Resources | Group Ten vs. Atico Mining | Group Ten vs. Prime Mining Corp | Group Ten vs. Wallbridge Mining |
| Prime Mining vs. Kenorland Minerals | Prime Mining vs. Canstar Resources | Prime Mining vs. Euro Manganese | Prime Mining vs. Chalice Mining Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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