Correlation Between Rainy Mountain and Infinico Metals
Can any of the company-specific risk be diversified away by investing in both Rainy Mountain and Infinico Metals 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 Rainy Mountain and Infinico Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rainy Mountain Royalty and Infinico Metals Corp, you can compare the effects of market volatilities on Rainy Mountain and Infinico Metals 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 Rainy Mountain with a short position of Infinico Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rainy Mountain and Infinico Metals.
Diversification Opportunities for Rainy Mountain and Infinico Metals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rainy and Infinico is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Rainy Mountain Royalty and Infinico Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinico Metals Corp and Rainy Mountain 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 Rainy Mountain Royalty are associated (or correlated) with Infinico Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinico Metals Corp has no effect on the direction of Rainy Mountain i.e., Rainy Mountain and Infinico Metals go up and down completely randomly.
Pair Corralation between Rainy Mountain and Infinico Metals
Assuming the 90 days horizon Rainy Mountain Royalty is expected to generate 0.52 times more return on investment than Infinico Metals. However, Rainy Mountain Royalty is 1.94 times less risky than Infinico Metals. It trades about 0.21 of its potential returns per unit of risk. Infinico Metals Corp is currently generating about -0.12 per unit of risk. If you would invest 4.00 in Rainy Mountain Royalty on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Rainy Mountain Royalty or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rainy Mountain Royalty vs. Infinico Metals Corp
Performance |
| Timeline |
| Rainy Mountain Royalty |
| Infinico Metals Corp |
Rainy Mountain and Infinico Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rainy Mountain and Infinico Metals
The main advantage of trading using opposite Rainy Mountain and Infinico Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rainy Mountain position performs unexpectedly, Infinico Metals 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 Infinico Metals will offset losses from the drop in Infinico Metals' long position.| Rainy Mountain vs. Plato Gold Corp | Rainy Mountain vs. Rochester Resources | Rainy Mountain vs. Forstrong Global Income | Rainy Mountain vs. Terreno Resources Corp |
| Infinico Metals vs. Rainy Mountain Royalty | Infinico Metals vs. Plato Gold Corp | Infinico Metals vs. Rochester Resources | Infinico Metals vs. Forstrong Global Income |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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