Correlation Between Saint Jean and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Saint Jean and BCM 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 Saint Jean and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saint Jean Carbon and BCM Resources, you can compare the effects of market volatilities on Saint Jean and BCM 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 Saint Jean with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saint Jean and BCM Resources.
Diversification Opportunities for Saint Jean and BCM Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saint and BCM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Saint Jean Carbon and BCM Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources and Saint Jean 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 Saint Jean Carbon are associated (or correlated) with BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources has no effect on the direction of Saint Jean i.e., Saint Jean and BCM Resources go up and down completely randomly.
Pair Corralation between Saint Jean and BCM Resources
Assuming the 90 days horizon Saint Jean is expected to generate 1.07 times less return on investment than BCM Resources. In addition to that, Saint Jean is 1.0 times more volatile than BCM Resources. It trades about 0.03 of its total potential returns per unit of risk. BCM Resources is currently generating about 0.04 per unit of volatility. If you would invest 8.06 in BCM Resources on September 3, 2024 and sell it today you would lose (4.53) from holding BCM Resources or give up 56.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saint Jean Carbon vs. BCM Resources
Performance |
| Timeline |
| Saint Jean Carbon |
| BCM Resources |
Saint Jean and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saint Jean and BCM Resources
The main advantage of trading using opposite Saint Jean and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saint Jean position performs unexpectedly, BCM 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 BCM Resources will offset losses from the drop in BCM Resources' long position.| Saint Jean vs. ZincX Resources Corp | Saint Jean vs. Mundoro Capital | Saint Jean vs. Strategic Resources | Saint Jean vs. Norra Metals Corp |
| BCM Resources vs. Edison Cobalt Corp | BCM Resources vs. Champion Bear Resources | BCM Resources vs. Avarone Metals | BCM 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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