Correlation Between Sherritt International and HudBay Minerals
Can any of the company-specific risk be diversified away by investing in both Sherritt International 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 Sherritt International and HudBay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherritt International and HudBay Minerals, you can compare the effects of market volatilities on Sherritt International 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 Sherritt International with a short position of HudBay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherritt International and HudBay Minerals.
Diversification Opportunities for Sherritt International and HudBay Minerals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sherritt and HudBay is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sherritt International and HudBay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HudBay Minerals and Sherritt International 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 Sherritt International 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 Sherritt International i.e., Sherritt International and HudBay Minerals go up and down completely randomly.
Pair Corralation between Sherritt International and HudBay Minerals
Given the investment horizon of 90 days Sherritt International is expected to under-perform the HudBay Minerals. In addition to that, Sherritt International is 1.32 times more volatile than HudBay Minerals. It trades about -0.12 of its total potential returns per unit of risk. HudBay Minerals is currently generating about -0.07 per unit of volatility. If you would invest 1,295 in HudBay Minerals on August 31, 2024 and sell it today you would lose (69.00) from holding HudBay Minerals or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherritt International vs. HudBay Minerals
Performance |
| Timeline |
| Sherritt International |
| HudBay Minerals |
Sherritt International and HudBay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherritt International and HudBay Minerals
The main advantage of trading using opposite Sherritt International and HudBay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherritt International 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.| Sherritt International vs. HudBay Minerals | Sherritt International vs. Lundin Mining | Sherritt International vs. First Quantum Minerals | Sherritt International vs. Ivanhoe Mines |
| HudBay Minerals vs. Lundin Mining | HudBay Minerals vs. First Quantum Minerals | HudBay Minerals vs. Ivanhoe Mines | HudBay Minerals vs. Capstone Mining Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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