Correlation Between ValOre Metals and Linamar
Can any of the company-specific risk be diversified away by investing in both ValOre Metals and Linamar 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 ValOre Metals and Linamar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ValOre Metals Corp and Linamar, you can compare the effects of market volatilities on ValOre Metals and Linamar 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 ValOre Metals with a short position of Linamar. Check out your portfolio center. Please also check ongoing floating volatility patterns of ValOre Metals and Linamar.
Diversification Opportunities for ValOre Metals and Linamar
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ValOre and Linamar is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ValOre Metals Corp and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar and ValOre 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 ValOre Metals Corp are associated (or correlated) with Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of ValOre Metals i.e., ValOre Metals and Linamar go up and down completely randomly.
Pair Corralation between ValOre Metals and Linamar
Given the investment horizon of 90 days ValOre Metals Corp is expected to generate 5.31 times more return on investment than Linamar. However, ValOre Metals is 5.31 times more volatile than Linamar. It trades about 0.02 of its potential returns per unit of risk. Linamar is currently generating about 0.01 per unit of risk. If you would invest 27.00 in ValOre Metals Corp on August 27, 2024 and sell it today you would lose (19.00) from holding ValOre Metals Corp or give up 70.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ValOre Metals Corp vs. Linamar
Performance |
| Timeline |
| ValOre Metals Corp |
| Linamar |
ValOre Metals and Linamar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ValOre Metals and Linamar
The main advantage of trading using opposite ValOre Metals and Linamar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ValOre Metals position performs unexpectedly, Linamar 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 Linamar will offset losses from the drop in Linamar's long position.| ValOre Metals vs. ALX Uranium Corp | ValOre Metals vs. Forum Energy Metals | ValOre Metals vs. K2 Gold | ValOre Metals vs. Blue Sky Uranium |
| Linamar vs. Martinrea International | Linamar vs. Magna International | Linamar vs. CCL Industries | Linamar vs. Stella Jones |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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