Correlation Between Infinico Metals and Sarama Resource

Can any of the company-specific risk be diversified away by investing in both Infinico Metals and Sarama Resource 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 Infinico Metals and Sarama Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Infinico Metals and Sarama Resource

-0.34

Correlation Coefficient

Infinico Metals  Sarama Resource

Very good diversification

The 3 months correlation between Infinico and Sarama is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Sarama Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarama Resource and Infinico 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 Infinico Metals Corp are associated (or correlated) with Sarama Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarama Resource has no effect on the direction of Infinico Metals i.e., Infinico Metals and Sarama Resource go up and down completely randomly.

Pair Corralation between Infinico Metals and Sarama Resource

Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 1.1 times more return on investment than Sarama Resource. However, Infinico Metals is 1.1 times more volatile than Sarama Resource. It trades about 0.04 of its potential returns per unit of risk. Sarama Resource is currently generating about 0.02 per unit of risk. If you would invest  4.00  in Infinico Metals Corp on September 12, 2024 and sell it today you would lose (1.50) from holding Infinico Metals Corp or give up 37.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.97%
Values	Daily Returns

Infinico Metals Corp  vs.  Sarama Resource

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sarama Resource

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Infinico Metals and Sarama Resource

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

The idea behind Infinico Metals Corp and Sarama Resource 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.