Correlation Between Kenorland Minerals and Prime Mining

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

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

Diversification Opportunities for Kenorland Minerals and Prime Mining

0.76

Correlation Coefficient

Kenorland Minerals  Prime Mining

Poor diversification

The 3 months correlation between Kenorland and Prime is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kenorland Minerals and Prime Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Mining Corp and Kenorland Minerals 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 Kenorland Minerals are associated (or correlated) with Prime Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Mining Corp has no effect on the direction of Kenorland Minerals i.e., Kenorland Minerals and Prime Mining go up and down completely randomly.

Pair Corralation between Kenorland Minerals and Prime Mining

Assuming the 90 days horizon Kenorland Minerals is expected to generate 0.45 times more return on investment than Prime Mining. However, Kenorland Minerals is 2.23 times less risky than Prime Mining. It trades about 0.05 of its potential returns per unit of risk. Prime Mining Corp is currently generating about 0.0 per unit of risk. If you would invest  71.00  in Kenorland Minerals on September 3, 2024 and sell it today you would earn a total of  5.00  from holding Kenorland Minerals or generate 7.04% return on investment over 90 days.

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

Kenorland Minerals  vs.  Prime Mining Corp

Kenorland Minerals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kenorland Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Kenorland Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Prime Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prime Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Prime Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kenorland Minerals and Prime Mining

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

The idea behind Kenorland Minerals and Prime 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.