Correlation Between Searchlight Resources and Pampa Metals
Can any of the company-specific risk be diversified away by investing in both Searchlight Resources and Pampa Metals 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 Pampa Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Searchlight Resources and Pampa Metals, you can compare the effects of market volatilities on Searchlight Resources and Pampa Metals 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 Pampa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Searchlight Resources and Pampa Metals.
Diversification Opportunities for Searchlight Resources and Pampa Metals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Searchlight and Pampa is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Searchlight Resources and Pampa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Metals 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 Pampa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Metals has no effect on the direction of Searchlight Resources i.e., Searchlight Resources and Pampa Metals go up and down completely randomly.
Pair Corralation between Searchlight Resources and Pampa Metals
Assuming the 90 days horizon Searchlight Resources is expected to generate 8.72 times less return on investment than Pampa Metals. But when comparing it to its historical volatility, Searchlight Resources is 1.88 times less risky than Pampa Metals. It trades about 0.02 of its potential returns per unit of risk. Pampa Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.31 in Pampa Metals on August 25, 2024 and sell it today you would earn a total of 11.69 from holding Pampa Metals or generate 271.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Searchlight Resources vs. Pampa Metals
Performance |
| Timeline |
| Searchlight Resources |
| Pampa Metals |
Searchlight Resources and Pampa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Searchlight Resources and Pampa Metals
The main advantage of trading using opposite Searchlight Resources and Pampa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Searchlight Resources position performs unexpectedly, Pampa Metals 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 Pampa Metals will offset losses from the drop in Pampa Metals' long position.| Searchlight Resources vs. Pampa Metals | Searchlight Resources vs. Progressive Planet Solutions | Searchlight Resources vs. Durango Resources | Searchlight Resources vs. Avarone Metals |
| Pampa Metals vs. Surge Battery Metals | Pampa Metals vs. United Royale Holdings | Pampa Metals vs. Hillcrest Energy Technologies | Pampa Metals vs. Star Alliance International |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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