Correlation Between Durango Resources and Cantex Mine

Can any of the company-specific risk be diversified away by investing in both Durango Resources and Cantex Mine 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 Durango Resources and Cantex Mine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Durango Resources and Cantex Mine Development, you can compare the effects of market volatilities on Durango Resources and Cantex Mine 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 Durango Resources with a short position of Cantex Mine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durango Resources and Cantex Mine.

Diversification Opportunities for Durango Resources and Cantex Mine

0.54

Correlation Coefficient

Durango Resources  Cantex Mine

Very weak diversification

The 3 months correlation between Durango and Cantex is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Durango Resources and Cantex Mine Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantex Mine Development and Durango Resources 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 Durango Resources are associated (or correlated) with Cantex Mine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantex Mine Development has no effect on the direction of Durango Resources i.e., Durango Resources and Cantex Mine go up and down completely randomly.

Pair Corralation between Durango Resources and Cantex Mine

Assuming the 90 days horizon Durango Resources is expected to generate 1.7 times less return on investment than Cantex Mine. In addition to that, Durango Resources is 1.08 times more volatile than Cantex Mine Development. It trades about 0.07 of its total potential returns per unit of risk. Cantex Mine Development is currently generating about 0.13 per unit of volatility. If you would invest  7.41  in Cantex Mine Development on September 4, 2024 and sell it today you would earn a total of  1.44  from holding Cantex Mine Development or generate 19.43% return on investment over 90 days.

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

Durango Resources  vs.  Cantex Mine Development

Durango Resources

Risk-Adjusted Performance

3 of 100

Insignificant

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

Cantex Mine Development

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cantex Mine Development are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cantex Mine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Durango Resources and Cantex Mine

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

The idea behind Durango Resources and Cantex Mine Development 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.