Correlation Between Prime Mining and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Prime Mining and Surge Copper 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 Surge Copper 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 Surge Copper Corp, you can compare the effects of market volatilities on Prime Mining and Surge Copper 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 Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Mining and Surge Copper.
Diversification Opportunities for Prime Mining and Surge Copper
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prime and Surge is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Prime Mining Corp and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp 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 Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Prime Mining i.e., Prime Mining and Surge Copper go up and down completely randomly.
Pair Corralation between Prime Mining and Surge Copper
Assuming the 90 days horizon Prime Mining Corp is expected to under-perform the Surge Copper. In addition to that, Prime Mining is 1.26 times more volatile than Surge Copper Corp. It trades about -0.14 of its total potential returns per unit of risk. Surge Copper Corp is currently generating about -0.12 per unit of volatility. If you would invest 8.46 in Surge Copper Corp on August 29, 2024 and sell it today you would lose (1.58) from holding Surge Copper Corp or give up 18.68% 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. Surge Copper Corp
Performance |
| Timeline |
| Prime Mining Corp |
| Surge Copper Corp |
Prime Mining and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Mining and Surge Copper
The main advantage of trading using opposite Prime Mining and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Mining position performs unexpectedly, Surge Copper 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 Surge Copper will offset losses from the drop in Surge Copper's long position.| Prime Mining vs. Kenorland Minerals | Prime Mining vs. Canstar Resources | Prime Mining vs. Euro Manganese | Prime Mining vs. Chalice Mining Limited |
| Surge Copper vs. Rockridge Resources | Surge Copper vs. Vital Metals Limited | Surge Copper vs. Ameriwest Lithium | Surge Copper vs. Osisko Metals Incorporated |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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