Correlation Between Metals Creek and Greenland Minerals

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

By analyzing existing cross correlation between Metals Creek Resources and Greenland Minerals And, you can compare the effects of market volatilities on Metals Creek and Greenland Minerals 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 Metals Creek with a short position of Greenland Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Creek and Greenland Minerals.

Diversification Opportunities for Metals Creek and Greenland Minerals

-0.17

Correlation Coefficient

Metals Creek  Greenland Minerals

Good diversification

The 3 months correlation between Metals and Greenland is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Metals Creek Resources and Greenland Minerals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Minerals And and Metals Creek 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 Metals Creek Resources are associated (or correlated) with Greenland Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Minerals And has no effect on the direction of Metals Creek i.e., Metals Creek and Greenland Minerals go up and down completely randomly.

Pair Corralation between Metals Creek and Greenland Minerals

Assuming the 90 days horizon Metals Creek is expected to generate 1.98 times less return on investment than Greenland Minerals. But when comparing it to its historical volatility, Metals Creek Resources is 1.48 times less risky than Greenland Minerals. It trades about 0.09 of its potential returns per unit of risk. Greenland Minerals And is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Greenland Minerals And on September 13, 2024 and sell it today you would lose (1.50) from holding Greenland Minerals And or give up 50.0% of portfolio value over 90 days.

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

Metals Creek Resources  vs.  Greenland Minerals And

Metals Creek Resources

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metals Creek Resources are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Metals Creek reported solid returns over the last few months and may actually be approaching a breakup point.

Greenland Minerals And

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenland Minerals And are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Greenland Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metals Creek and Greenland Minerals

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

The idea behind Metals Creek Resources and Greenland Minerals And 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.