Correlation Between Sterling Metals and Eagle Plains
Can any of the company-specific risk be diversified away by investing in both Sterling Metals and Eagle Plains 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 Eagle Plains 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 Eagle Plains Resources, you can compare the effects of market volatilities on Sterling Metals and Eagle Plains 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 Eagle Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Metals and Eagle Plains.
Diversification Opportunities for Sterling Metals and Eagle Plains
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sterling and Eagle is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Metals Corp and Eagle Plains Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Plains Resources 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 Eagle Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Plains Resources has no effect on the direction of Sterling Metals i.e., Sterling Metals and Eagle Plains go up and down completely randomly.
Pair Corralation between Sterling Metals and Eagle Plains
Assuming the 90 days horizon Sterling Metals Corp is expected to under-perform the Eagle Plains. But the otc stock apears to be less risky and, when comparing its historical volatility, Sterling Metals Corp is 1.69 times less risky than Eagle Plains. The otc stock trades about -0.19 of its potential returns per unit of risk. The Eagle Plains Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Eagle Plains Resources on September 1, 2024 and sell it today you would lose (1.00) from holding Eagle Plains Resources or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Metals Corp vs. Eagle Plains Resources
Performance |
| Timeline |
| Sterling Metals Corp |
| Eagle Plains Resources |
Sterling Metals and Eagle Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Metals and Eagle Plains
The main advantage of trading using opposite Sterling Metals and Eagle Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Metals position performs unexpectedly, Eagle Plains 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 Eagle Plains will offset losses from the drop in Eagle Plains' long position.| Sterling Metals vs. Progressive Planet Solutions | Sterling Metals vs. Durango Resources | Sterling Metals vs. Avarone Metals | Sterling Metals vs. Mundoro Capital |
| Eagle Plains vs. South32 Limited | Eagle Plains vs. NioCorp Developments Ltd | Eagle Plains vs. HUMANA INC | Eagle Plains vs. SCOR PK |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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