Correlation Between Cornish Metals and Sherritt International
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Sherritt International 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 Sherritt International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Sherritt International, you can compare the effects of market volatilities on Cornish Metals and Sherritt International 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 Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Sherritt International.
Diversification Opportunities for Cornish Metals and Sherritt International
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cornish and Sherritt is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International 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 Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of Cornish Metals i.e., Cornish Metals and Sherritt International go up and down completely randomly.
Pair Corralation between Cornish Metals and Sherritt International
Assuming the 90 days horizon Cornish Metals is expected to generate 5.0 times less return on investment than Sherritt International. In addition to that, Cornish Metals is 2.16 times more volatile than Sherritt International. It trades about 0.02 of its total potential returns per unit of risk. Sherritt International is currently generating about 0.24 per unit of volatility. If you would invest 11.00 in Sherritt International on October 24, 2024 and sell it today you would earn a total of 1.00 from holding Sherritt International or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. Sherritt International
Performance |
| Timeline |
| Cornish Metals |
| Sherritt International |
Cornish Metals and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Sherritt International
The main advantage of trading using opposite Cornish Metals and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.| Cornish Metals vs. Filo Mining Corp | Cornish Metals vs. Pan Global Resources | Cornish Metals vs. Alphamin Resources Corp | Cornish Metals vs. Adriatic Metals Plc |
| Sherritt International vs. Metals X Limited | Sherritt International vs. Interra Copper Corp | Sherritt International vs. Anglo American PLC | Sherritt International vs. OM Holdings Limited |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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