Correlation Between Sherritt International and Ascendant Resources
Can any of the company-specific risk be diversified away by investing in both Sherritt International and Ascendant Resources 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 Sherritt International and Ascendant Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherritt International and Ascendant Resources, you can compare the effects of market volatilities on Sherritt International and Ascendant Resources 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 Sherritt International with a short position of Ascendant Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherritt International and Ascendant Resources.
Diversification Opportunities for Sherritt International and Ascendant Resources
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sherritt and Ascendant is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sherritt International and Ascendant Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendant Resources and Sherritt International 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 Sherritt International are associated (or correlated) with Ascendant Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendant Resources has no effect on the direction of Sherritt International i.e., Sherritt International and Ascendant Resources go up and down completely randomly.
Pair Corralation between Sherritt International and Ascendant Resources
Assuming the 90 days horizon Sherritt International is expected to under-perform the Ascendant Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sherritt International is 1.3 times less risky than Ascendant Resources. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Ascendant Resources is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Ascendant Resources on August 26, 2024 and sell it today you would lose (11.81) from holding Ascendant Resources or give up 78.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherritt International vs. Ascendant Resources
Performance |
| Timeline |
| Sherritt International |
| Ascendant Resources |
Sherritt International and Ascendant Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherritt International and Ascendant Resources
The main advantage of trading using opposite Sherritt International and Ascendant Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherritt International position performs unexpectedly, Ascendant Resources 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 Ascendant Resources will offset losses from the drop in Ascendant Resources' long position.| Sherritt International vs. Ascendant Resources | Sherritt International vs. Cantex Mine Development | Sherritt International vs. Amarc Resources | Sherritt International vs. Sterling Metals Corp |
| Ascendant Resources vs. Edison Cobalt Corp | Ascendant Resources vs. Champion Bear Resources | Ascendant Resources vs. Avarone Metals | Ascendant Resources vs. Adriatic Metals PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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