Correlation Between Palamina Corp and KORE Mining

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

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

Diversification Opportunities for Palamina Corp and KORE Mining

0.62

Correlation Coefficient

Palamina Corp  KORE Mining

Poor diversification

The 3 months correlation between Palamina and KORE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Palamina Corp and KORE Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORE Mining and Palamina Corp 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 Palamina Corp are associated (or correlated) with KORE Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORE Mining has no effect on the direction of Palamina Corp i.e., Palamina Corp and KORE Mining go up and down completely randomly.

Pair Corralation between Palamina Corp and KORE Mining

Assuming the 90 days horizon Palamina Corp is expected to generate 59.69 times less return on investment than KORE Mining. In addition to that, Palamina Corp is 1.06 times more volatile than KORE Mining. It trades about 0.0 of its total potential returns per unit of risk. KORE Mining is currently generating about 0.09 per unit of volatility. If you would invest  2.00  in KORE Mining on September 4, 2024 and sell it today you would earn a total of  0.60  from holding KORE Mining or generate 30.0% return on investment over 90 days.

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

Palamina Corp  vs.  KORE Mining

Palamina Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

KORE Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KORE Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, KORE Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palamina Corp and KORE Mining

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

The idea behind Palamina Corp and KORE Mining 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.