Correlation Between Prime Mining and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Prime Mining and Ascot 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 Prime Mining and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Mining Corp and Ascot Resources, you can compare the effects of market volatilities on Prime Mining and Ascot 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 Prime Mining with a short position of Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Mining and Ascot Resources.
Diversification Opportunities for Prime Mining and Ascot Resources
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Prime and Ascot is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Prime Mining Corp and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Prime Mining 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 Mining Corp are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Prime Mining i.e., Prime Mining and Ascot Resources go up and down completely randomly.
Pair Corralation between Prime Mining and Ascot Resources
Assuming the 90 days horizon Prime Mining Corp is expected to generate 0.71 times more return on investment than Ascot Resources. However, Prime Mining Corp is 1.4 times less risky than Ascot Resources. It trades about -0.02 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.04 per unit of risk. If you would invest 164.00 in Prime Mining Corp on September 1, 2024 and sell it today you would lose (57.00) from holding Prime Mining Corp or give up 34.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Mining Corp vs. Ascot Resources
Performance |
| Timeline |
| Prime Mining Corp |
| Ascot Resources |
Prime Mining and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Mining and Ascot Resources
The main advantage of trading using opposite Prime Mining and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Mining position performs unexpectedly, Ascot 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Prime Mining vs. Kenorland Minerals | Prime Mining vs. Canstar Resources | Prime Mining vs. Euro Manganese | Prime Mining vs. Chalice Mining Limited |
| Ascot Resources vs. South32 Limited | Ascot Resources vs. NioCorp Developments Ltd | Ascot Resources vs. HUMANA INC | Ascot Resources vs. SCOR PK |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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