Correlation Between Adventus Mining and Sterling Metals

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

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

Diversification Opportunities for Adventus Mining and Sterling Metals

0.35

Correlation Coefficient

Adventus Mining  Sterling Metals

Weak diversification

The 3 months correlation between Adventus and Sterling is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Adventus Mining and Sterling Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Metals Corp and Adventus 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 Adventus Mining are associated (or correlated) with Sterling Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Metals Corp has no effect on the direction of Adventus Mining i.e., Adventus Mining and Sterling Metals go up and down completely randomly.

Pair Corralation between Adventus Mining and Sterling Metals

If you would invest  32.00  in Adventus Mining on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Adventus Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Adventus Mining  vs.  Sterling Metals Corp

Adventus Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sterling Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Adventus Mining and Sterling Metals

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

The idea behind Adventus Mining and Sterling 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.