Correlation Between Puma Exploration and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and Hudbay Minerals 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 Puma Exploration and Hudbay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and Hudbay Minerals, you can compare the effects of market volatilities on Puma Exploration and Hudbay Minerals 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 Puma Exploration with a short position of Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and Hudbay Minerals.
Diversification Opportunities for Puma Exploration and Hudbay Minerals
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Puma and Hudbay is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals and Puma Exploration 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 Puma Exploration are associated (or correlated) with Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Puma Exploration i.e., Puma Exploration and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Puma Exploration and Hudbay Minerals
Assuming the 90 days horizon Puma Exploration is expected to generate 1.59 times more return on investment than Hudbay Minerals. However, Puma Exploration is 1.59 times more volatile than Hudbay Minerals. It trades about 0.02 of its potential returns per unit of risk. Hudbay Minerals is currently generating about -0.07 per unit of risk. If you would invest 6.00 in Puma Exploration on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Puma Exploration or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Exploration vs. Hudbay Minerals
Performance |
| Timeline |
| Puma Exploration |
| Hudbay Minerals |
Puma Exploration and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and Hudbay Minerals
The main advantage of trading using opposite Puma Exploration and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.| Puma Exploration vs. Aurion Resources | Puma Exploration vs. Liberty Gold Corp | Puma Exploration vs. Orezone Gold Corp | Puma Exploration vs. Radisson Mining Resources |
| Hudbay Minerals vs. Labrador Gold Corp | Hudbay Minerals vs. Aurion Resources | Hudbay Minerals vs. Puma Exploration | Hudbay Minerals vs. Golden Star Resource |
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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