Correlation Between Gungnir Resources and Inventus Mining

Can any of the company-specific risk be diversified away by investing in both Gungnir Resources and Inventus Mining 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 Gungnir Resources and Inventus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gungnir Resources and Inventus Mining Corp, you can compare the effects of market volatilities on Gungnir Resources and Inventus Mining 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 Gungnir Resources with a short position of Inventus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gungnir Resources and Inventus Mining.

Diversification Opportunities for Gungnir Resources and Inventus Mining

-0.44

Correlation Coefficient

Gungnir Resources  Inventus Mining

Very good diversification

The 3 months correlation between Gungnir and Inventus is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gungnir Resources and Inventus Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventus Mining Corp and Gungnir 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 Gungnir Resources are associated (or correlated) with Inventus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventus Mining Corp has no effect on the direction of Gungnir Resources i.e., Gungnir Resources and Inventus Mining go up and down completely randomly.

Pair Corralation between Gungnir Resources and Inventus Mining

Assuming the 90 days horizon Gungnir Resources is expected to generate 4.07 times less return on investment than Inventus Mining. But when comparing it to its historical volatility, Gungnir Resources is 1.04 times less risky than Inventus Mining. It trades about 0.03 of its potential returns per unit of risk. Inventus Mining Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Inventus Mining Corp on September 15, 2024 and sell it today you would earn a total of  3.00  from holding Inventus Mining Corp or generate 60.0% return on investment over 90 days.

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

Gungnir Resources  vs.  Inventus Mining Corp

Gungnir Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gungnir Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gungnir Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Inventus Mining Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inventus Mining Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Inventus Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gungnir Resources and Inventus Mining

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

The idea behind Gungnir Resources and Inventus Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.