Correlation Between Puma Exploration and Hummingbird Resources
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and Hummingbird 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 Puma Exploration and Hummingbird Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and Hummingbird Resources PLC, you can compare the effects of market volatilities on Puma Exploration and Hummingbird 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 Puma Exploration with a short position of Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and Hummingbird Resources.
Diversification Opportunities for Puma Exploration and Hummingbird Resources
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puma and Hummingbird is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC 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 Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of Puma Exploration i.e., Puma Exploration and Hummingbird Resources go up and down completely randomly.
Pair Corralation between Puma Exploration and Hummingbird Resources
Assuming the 90 days horizon Puma Exploration is expected to generate 0.57 times more return on investment than Hummingbird Resources. However, Puma Exploration is 1.77 times less risky than Hummingbird Resources. It trades about 0.09 of its potential returns per unit of risk. Hummingbird Resources PLC is currently generating about -0.16 per unit of risk. If you would invest 5.00 in Puma Exploration on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Puma Exploration or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Exploration vs. Hummingbird Resources PLC
Performance |
| Timeline |
| Puma Exploration |
| Hummingbird Resources PLC |
Puma Exploration and Hummingbird Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and Hummingbird Resources
The main advantage of trading using opposite Puma Exploration and Hummingbird Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, Hummingbird 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 Hummingbird Resources will offset losses from the drop in Hummingbird Resources' 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 |
| Hummingbird Resources vs. Aurion Resources | Hummingbird Resources vs. Liberty Gold Corp | Hummingbird Resources vs. Orezone Gold Corp | Hummingbird Resources vs. Radisson Mining Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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