Correlation Between Prime Meridian and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Prime Meridian and Globex 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 Prime Meridian and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Meridian Resources and Globex Mining Enterprises, you can compare the effects of market volatilities on Prime Meridian and Globex 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 Prime Meridian with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Meridian and Globex Mining.
Diversification Opportunities for Prime Meridian and Globex Mining
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prime and Globex is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Prime Meridian Resources and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and Prime Meridian 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 Prime Meridian Resources are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Prime Meridian i.e., Prime Meridian and Globex Mining go up and down completely randomly.
Pair Corralation between Prime Meridian and Globex Mining
Assuming the 90 days horizon Prime Meridian Resources is expected to under-perform the Globex Mining. In addition to that, Prime Meridian is 2.51 times more volatile than Globex Mining Enterprises. It trades about -0.01 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.04 per unit of volatility. If you would invest 66.00 in Globex Mining Enterprises on September 14, 2024 and sell it today you would earn a total of 13.00 from holding Globex Mining Enterprises or generate 19.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Prime Meridian Resources vs. Globex Mining Enterprises
Performance |
| Timeline |
| Prime Meridian Resources |
| Globex Mining Enterprises |
Prime Meridian and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Meridian and Globex Mining
The main advantage of trading using opposite Prime Meridian and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Meridian position performs unexpectedly, Globex 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Prime Meridian vs. Revival Gold | Prime Meridian vs. Galiano Gold | Prime Meridian vs. US Gold Corp | Prime Meridian vs. HUMANA INC |
| Globex Mining vs. Atomic Minerals | Globex Mining vs. Mundoro Capital | Globex Mining vs. E79 Resources Corp | Globex Mining vs. Norra Metals Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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