Correlation Between Applied Minerals and Granite Creek

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

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

Diversification Opportunities for Applied Minerals and Granite Creek

0.0

Correlation Coefficient

Applied Minerals  Granite Creek

Pay attention - limited upside

The 3 months correlation between Applied and Granite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Minerals and Granite Creek Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Creek Copper and Applied Minerals 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 Applied Minerals are associated (or correlated) with Granite Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Creek Copper has no effect on the direction of Applied Minerals i.e., Applied Minerals and Granite Creek go up and down completely randomly.

Pair Corralation between Applied Minerals and Granite Creek

If you would invest  1.43  in Granite Creek Copper on December 29, 2024 and sell it today you would earn a total of  0.07  from holding Granite Creek Copper or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Applied Minerals  vs.  Granite Creek Copper

Applied Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applied Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Applied Minerals is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Granite Creek Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Creek Copper are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Granite Creek reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Minerals and Granite Creek

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

The idea behind Applied Minerals and Granite Creek Copper 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.

Check out your portfolio center.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.