Correlation Between Search Minerals and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Search Minerals and Eskay Mining 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 Search Minerals and Eskay Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Search Minerals and Eskay Mining Corp, you can compare the effects of market volatilities on Search Minerals and Eskay Mining 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 Search Minerals with a short position of Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Search Minerals and Eskay Mining.
Diversification Opportunities for Search Minerals and Eskay Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Search and Eskay is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Search Minerals and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp and Search Minerals 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 Search Minerals are associated (or correlated) with Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Search Minerals i.e., Search Minerals and Eskay Mining go up and down completely randomly.
Pair Corralation between Search Minerals and Eskay Mining
Assuming the 90 days horizon Search Minerals is expected to generate 12.45 times more return on investment than Eskay Mining. However, Search Minerals is 12.45 times more volatile than Eskay Mining Corp. It trades about 0.12 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.03 per unit of risk. If you would invest 2.00 in Search Minerals on September 1, 2024 and sell it today you would lose (0.80) from holding Search Minerals or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Search Minerals vs. Eskay Mining Corp
Performance |
| Timeline |
| Search Minerals |
| Eskay Mining Corp |
Search Minerals and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Search Minerals and Eskay Mining
The main advantage of trading using opposite Search Minerals and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Search Minerals position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Search Minerals vs. Sassy Resources | Search Minerals vs. Aldebaran Resources | Search Minerals vs. Tamino Minerals | Search Minerals vs. Myriad Uranium Corp |
| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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