Correlation Between Sierra Metals and Materion
Can any of the company-specific risk be diversified away by investing in both Sierra Metals and Materion 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 Sierra Metals and Materion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Metals and Materion, you can compare the effects of market volatilities on Sierra Metals and Materion 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 Sierra Metals with a short position of Materion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Metals and Materion.
Diversification Opportunities for Sierra Metals and Materion
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sierra and Materion is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Metals and Materion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materion and Sierra 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 Sierra Metals are associated (or correlated) with Materion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materion has no effect on the direction of Sierra Metals i.e., Sierra Metals and Materion go up and down completely randomly.
Pair Corralation between Sierra Metals and Materion
If you would invest 10,494 in Materion on September 2, 2024 and sell it today you would earn a total of 1,068 from holding Materion or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Sierra Metals vs. Materion
Performance |
| Timeline |
| Sierra Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Materion |
Sierra Metals and Materion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Metals and Materion
The main advantage of trading using opposite Sierra Metals and Materion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Metals position performs unexpectedly, Materion 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 Materion will offset losses from the drop in Materion's long position.| Sierra Metals vs. Kenorland Minerals | Sierra Metals vs. Canstar Resources | Sierra Metals vs. Prime Mining Corp | Sierra Metals vs. Euro Manganese |
| Materion vs. Skeena Resources | Materion vs. Compass Minerals International | Materion vs. IperionX Limited American | Materion vs. EMX Royalty Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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