Correlation Between Sterling Metals and Angkor Resources
Can any of the company-specific risk be diversified away by investing in both Sterling Metals and Angkor 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 Sterling Metals and Angkor Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Metals Corp and Angkor Resources Corp, you can compare the effects of market volatilities on Sterling Metals and Angkor 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 Sterling Metals with a short position of Angkor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Metals and Angkor Resources.
Diversification Opportunities for Sterling Metals and Angkor Resources
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and Angkor is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Metals Corp and Angkor Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angkor Resources Corp and Sterling Metals 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 Sterling Metals Corp are associated (or correlated) with Angkor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angkor Resources Corp has no effect on the direction of Sterling Metals i.e., Sterling Metals and Angkor Resources go up and down completely randomly.
Pair Corralation between Sterling Metals and Angkor Resources
Assuming the 90 days horizon Sterling Metals Corp is expected to generate 2.47 times more return on investment than Angkor Resources. However, Sterling Metals is 2.47 times more volatile than Angkor Resources Corp. It trades about 0.09 of its potential returns per unit of risk. Angkor Resources Corp is currently generating about 0.03 per unit of risk. If you would invest 2.00 in Sterling Metals Corp on August 29, 2024 and sell it today you would earn a total of 0.97 from holding Sterling Metals Corp or generate 48.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Sterling Metals Corp vs. Angkor Resources Corp
Performance |
| Timeline |
| Sterling Metals Corp |
| Angkor Resources Corp |
Sterling Metals and Angkor Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Metals and Angkor Resources
The main advantage of trading using opposite Sterling Metals and Angkor Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Metals position performs unexpectedly, Angkor 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 Angkor Resources will offset losses from the drop in Angkor Resources' long position.| Sterling Metals vs. Rockridge Resources | Sterling Metals vs. Ameriwest Lithium | Sterling Metals vs. Osisko Metals Incorporated | Sterling Metals vs. Volt Lithium Corp |
| Angkor Resources vs. Argo Gold | Angkor Resources vs. Blue Star Gold | Angkor Resources vs. Advance Gold Corp | Angkor Resources vs. Advance United Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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