Correlation Between South Star and CDN Maverick
Can any of the company-specific risk be diversified away by investing in both South Star and CDN Maverick 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 South Star and CDN Maverick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and CDN Maverick Capital, you can compare the effects of market volatilities on South Star and CDN Maverick 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 South Star with a short position of CDN Maverick. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and CDN Maverick.
Diversification Opportunities for South Star and CDN Maverick
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and CDN is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and CDN Maverick Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN Maverick Capital and South Star 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 South Star Battery are associated (or correlated) with CDN Maverick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN Maverick Capital has no effect on the direction of South Star i.e., South Star and CDN Maverick go up and down completely randomly.
Pair Corralation between South Star and CDN Maverick
Assuming the 90 days horizon South Star Battery is expected to under-perform the CDN Maverick. In addition to that, South Star is 1.55 times more volatile than CDN Maverick Capital. It trades about -0.08 of its total potential returns per unit of risk. CDN Maverick Capital is currently generating about -0.1 per unit of volatility. If you would invest 12.00 in CDN Maverick Capital on August 29, 2024 and sell it today you would lose (1.00) from holding CDN Maverick Capital or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. CDN Maverick Capital
Performance |
| Timeline |
| South Star Battery |
| CDN Maverick Capital |
South Star and CDN Maverick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and CDN Maverick
The main advantage of trading using opposite South Star and CDN Maverick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, CDN Maverick 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 CDN Maverick will offset losses from the drop in CDN Maverick's long position.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
| CDN Maverick vs. Aurelia Metals Limited | CDN Maverick vs. Artemis Resources | CDN Maverick vs. Ascendant Resources | CDN Maverick vs. Azimut 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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