Correlation Between Converge Technology and Marimaca Copper

Can any of the company-specific risk be diversified away by investing in both Converge Technology and Marimaca Copper 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 Converge Technology and Marimaca Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Converge Technology Solutions and Marimaca Copper Corp, you can compare the effects of market volatilities on Converge Technology and Marimaca Copper 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 Converge Technology with a short position of Marimaca Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and Marimaca Copper.

Diversification Opportunities for Converge Technology and Marimaca Copper

-0.69

Correlation Coefficient

Converge Technology  Marimaca Copper

Excellent diversification

The 3 months correlation between Converge and Marimaca is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Converge Technology i.e., Converge Technology and Marimaca Copper go up and down completely randomly.

Pair Corralation between Converge Technology and Marimaca Copper

Assuming the 90 days trading horizon Converge Technology Solutions is expected to under-perform the Marimaca Copper. In addition to that, Converge Technology is 1.45 times more volatile than Marimaca Copper Corp. It trades about -0.09 of its total potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.15 per unit of volatility. If you would invest  382.00  in Marimaca Copper Corp on August 31, 2024 and sell it today you would earn a total of  102.00  from holding Marimaca Copper Corp or generate 26.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Converge Technology Solutions  vs.  Marimaca Copper Corp

Converge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Marimaca Copper Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Marimaca Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Converge Technology and Marimaca Copper

The main advantage of trading using opposite Converge Technology and Marimaca Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology position performs unexpectedly, Marimaca Copper 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 Marimaca Copper will offset losses from the drop in Marimaca Copper's long position.

The idea behind Converge Technology Solutions and Marimaca Copper Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.