Correlation Between Searchlight Resources and Infinite Ore
Can any of the company-specific risk be diversified away by investing in both Searchlight Resources and Infinite Ore 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 Searchlight Resources and Infinite Ore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Searchlight Resources and Infinite Ore Corp, you can compare the effects of market volatilities on Searchlight Resources and Infinite Ore 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 Searchlight Resources with a short position of Infinite Ore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Searchlight Resources and Infinite Ore.
Diversification Opportunities for Searchlight Resources and Infinite Ore
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Searchlight and Infinite is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Searchlight Resources and Infinite Ore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinite Ore Corp and Searchlight Resources 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 Searchlight Resources are associated (or correlated) with Infinite Ore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinite Ore Corp has no effect on the direction of Searchlight Resources i.e., Searchlight Resources and Infinite Ore go up and down completely randomly.
Pair Corralation between Searchlight Resources and Infinite Ore
Assuming the 90 days horizon Searchlight Resources is expected to generate 2.29 times more return on investment than Infinite Ore. However, Searchlight Resources is 2.29 times more volatile than Infinite Ore Corp. It trades about 0.06 of its potential returns per unit of risk. Infinite Ore Corp is currently generating about 0.01 per unit of risk. If you would invest 2.22 in Searchlight Resources on November 5, 2024 and sell it today you would lose (0.99) from holding Searchlight Resources or give up 44.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Searchlight Resources vs. Infinite Ore Corp
Performance |
| Timeline |
| Searchlight Resources |
| Infinite Ore Corp |
Searchlight Resources and Infinite Ore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Searchlight Resources and Infinite Ore
The main advantage of trading using opposite Searchlight Resources and Infinite Ore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Searchlight Resources position performs unexpectedly, Infinite Ore 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 Infinite Ore will offset losses from the drop in Infinite Ore's long position.| Searchlight Resources vs. Hannan Metals | Searchlight Resources vs. Atco Mining | Searchlight Resources vs. Leading Edge Materials | Searchlight Resources vs. Arianne Phosphate |
| Infinite Ore vs. Pampa Metals | Infinite Ore vs. Progressive Planet Solutions | Infinite Ore vs. Searchlight Resources | Infinite Ore vs. Durango Resources |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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