Correlation Between Polymet Mining and Arizona Metals

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

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

Diversification Opportunities for Polymet Mining and Arizona Metals

0.15

Correlation Coefficient

Polymet Mining  Arizona Metals

Average diversification

The 3 months correlation between Polymet and Arizona is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Polymet Mining Corp and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals Corp and Polymet Mining 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 Polymet Mining Corp are associated (or correlated) with Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Polymet Mining i.e., Polymet Mining and Arizona Metals go up and down completely randomly.

Pair Corralation between Polymet Mining and Arizona Metals

If you would invest  133.00  in Arizona Metals Corp on September 14, 2024 and sell it today you would lose (9.00) from holding Arizona Metals Corp or give up 6.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Polymet Mining Corp  vs.  Arizona Metals Corp

Polymet Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polymet Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Polymet Mining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Arizona Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Polymet Mining and Arizona Metals

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

The idea behind Polymet Mining Corp and Arizona Metals 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.