Correlation Between Stelar Metals and Truscott Mining
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Truscott 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 Stelar Metals and Truscott Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Truscott Mining Corp, you can compare the effects of market volatilities on Stelar Metals and Truscott 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 Stelar Metals with a short position of Truscott Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Truscott Mining.
Diversification Opportunities for Stelar Metals and Truscott Mining
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stelar and Truscott is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp and Stelar 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 Stelar Metals are associated (or correlated) with Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Stelar Metals i.e., Stelar Metals and Truscott Mining go up and down completely randomly.
Pair Corralation between Stelar Metals and Truscott Mining
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Truscott Mining. But the stock apears to be less risky and, when comparing its historical volatility, Stelar Metals is 2.17 times less risky than Truscott Mining. The stock trades about -0.2 of its potential returns per unit of risk. The Truscott Mining Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 7.70 in Truscott Mining Corp on August 26, 2024 and sell it today you would lose (0.70) from holding Truscott Mining Corp or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Truscott Mining Corp
Performance |
| Timeline |
| Stelar Metals |
| Truscott Mining Corp |
Stelar Metals and Truscott Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Truscott Mining
The main advantage of trading using opposite Stelar Metals and Truscott Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Truscott 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 Truscott Mining will offset losses from the drop in Truscott Mining's long position.| Stelar Metals vs. Aurelia Metals | Stelar Metals vs. Thorney Technologies | Stelar Metals vs. Autosports Group | Stelar Metals vs. Ras Technology Holdings |
| Truscott Mining vs. Northern Star Resources | Truscott Mining vs. Evolution Mining | Truscott Mining vs. Bluescope Steel | Truscott Mining vs. Sandfire Resources NL |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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