Correlation Between Cornish Metals and SPACE
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and SPACE 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 Cornish Metals and SPACE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and SPACE, you can compare the effects of market volatilities on Cornish Metals and SPACE 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 Cornish Metals with a short position of SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and SPACE.
Diversification Opportunities for Cornish Metals and SPACE
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cornish and SPACE is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and Cornish 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 Cornish Metals are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Cornish Metals i.e., Cornish Metals and SPACE go up and down completely randomly.
Pair Corralation between Cornish Metals and SPACE
Assuming the 90 days horizon Cornish Metals is expected to generate 1.63 times more return on investment than SPACE. However, Cornish Metals is 1.63 times more volatile than SPACE. It trades about 0.06 of its potential returns per unit of risk. SPACE is currently generating about 0.05 per unit of risk. If you would invest 16.00 in Cornish Metals on December 1, 2024 and sell it today you would lose (7.00) from holding Cornish Metals or give up 43.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 49.71% |
| Values | Daily Returns |
Cornish Metals vs. SPACE
Performance |
| Timeline |
| Cornish Metals |
| SPACE |
Cornish Metals and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and SPACE
The main advantage of trading using opposite Cornish Metals and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| Cornish Metals vs. Pan Global Resources | Cornish Metals vs. Alphamin Resources Corp | Cornish Metals vs. Adriatic Metals Plc | Cornish Metals vs. Iluka Resources Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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