Correlation Between Scandium Canada and Keg Royalties

Can any of the company-specific risk be diversified away by investing in both Scandium Canada and Keg Royalties 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 Scandium Canada and Keg Royalties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Scandium Canada and The Keg Royalties, you can compare the effects of market volatilities on Scandium Canada and Keg Royalties 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 Scandium Canada with a short position of Keg Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandium Canada and Keg Royalties.

Diversification Opportunities for Scandium Canada and Keg Royalties

-0.38

Correlation Coefficient

Scandium Canada  Keg Royalties

Very good diversification

The 3 months correlation between Scandium and Keg is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Scandium Canada and The Keg Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keg Royalties and Scandium Canada 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 Scandium Canada are associated (or correlated) with Keg Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keg Royalties has no effect on the direction of Scandium Canada i.e., Scandium Canada and Keg Royalties go up and down completely randomly.

Pair Corralation between Scandium Canada and Keg Royalties

Assuming the 90 days horizon Scandium Canada is expected to generate 19.96 times more return on investment than Keg Royalties. However, Scandium Canada is 19.96 times more volatile than The Keg Royalties. It trades about 0.03 of its potential returns per unit of risk. The Keg Royalties is currently generating about 0.09 per unit of risk. If you would invest  3.00  in Scandium Canada on September 2, 2024 and sell it today you would lose (1.00) from holding Scandium Canada or give up 33.33% of portfolio value over 90 days.

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

Scandium Canada  vs.  The Keg Royalties

Scandium Canada

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Scandium Canada are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Scandium Canada showed solid returns over the last few months and may actually be approaching a breakup point.

Keg Royalties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Keg Royalties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Keg Royalties is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Scandium Canada and Keg Royalties

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

The idea behind Scandium Canada and The Keg Royalties 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.