Correlation Between Sassy Resources and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Sassy Resources and Cornish 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 Sassy Resources and Cornish Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sassy Resources and Cornish Metals, you can compare the effects of market volatilities on Sassy Resources and Cornish 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 Sassy Resources with a short position of Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sassy Resources and Cornish Metals.
Diversification Opportunities for Sassy Resources and Cornish Metals
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sassy and Cornish is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sassy Resources and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals and Sassy 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 Sassy Resources are associated (or correlated) with Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Sassy Resources i.e., Sassy Resources and Cornish Metals go up and down completely randomly.
Pair Corralation between Sassy Resources and Cornish Metals
Assuming the 90 days horizon Sassy Resources is expected to generate 0.6 times more return on investment than Cornish Metals. However, Sassy Resources is 1.65 times less risky than Cornish Metals. It trades about -0.27 of its potential returns per unit of risk. Cornish Metals is currently generating about -0.22 per unit of risk. If you would invest 8.40 in Sassy Resources on September 3, 2024 and sell it today you would lose (2.43) from holding Sassy Resources or give up 28.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sassy Resources vs. Cornish Metals
Performance |
| Timeline |
| Sassy Resources |
| Cornish Metals |
Sassy Resources and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sassy Resources and Cornish Metals
The main advantage of trading using opposite Sassy Resources and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sassy Resources position performs unexpectedly, Cornish 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Sassy Resources vs. Qubec Nickel Corp | Sassy Resources vs. IGO Limited | Sassy Resources vs. Avarone Metals | Sassy Resources vs. Adriatic Metals PLC |
| Cornish Metals vs. Advantage Solutions | Cornish Metals vs. Atlas Corp | Cornish Metals vs. PureCycle Technologies | Cornish Metals vs. WM Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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