Correlation Between CDN Maverick and Bradda Head

Can any of the company-specific risk be diversified away by investing in both CDN Maverick and Bradda Head 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 CDN Maverick and Bradda Head into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CDN Maverick Capital and Bradda Head Lithium, you can compare the effects of market volatilities on CDN Maverick and Bradda Head 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 CDN Maverick with a short position of Bradda Head. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Bradda Head.

Diversification Opportunities for CDN Maverick and Bradda Head

-0.14

Correlation Coefficient

CDN Maverick  Bradda Head

Good diversification

The 3 months correlation between CDN and Bradda is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Bradda Head Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bradda Head Lithium and CDN Maverick 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 CDN Maverick Capital are associated (or correlated) with Bradda Head. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bradda Head Lithium has no effect on the direction of CDN Maverick i.e., CDN Maverick and Bradda Head go up and down completely randomly.

Pair Corralation between CDN Maverick and Bradda Head

Assuming the 90 days horizon CDN Maverick Capital is expected to generate 1.47 times more return on investment than Bradda Head. However, CDN Maverick is 1.47 times more volatile than Bradda Head Lithium. It trades about 0.1 of its potential returns per unit of risk. Bradda Head Lithium is currently generating about 0.01 per unit of risk. If you would invest  8.00  in CDN Maverick Capital on December 28, 2024 and sell it today you would earn a total of  4.00  from holding CDN Maverick Capital or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

CDN Maverick Capital  vs.  Bradda Head Lithium

CDN Maverick Capital

Risk-Adjusted Performance

OK

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

Bradda Head Lithium

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CDN Maverick and Bradda Head

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

The idea behind CDN Maverick Capital and Bradda Head Lithium 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.