Correlation Between CDN Maverick and Ucore Rare

Can any of the company-specific risk be diversified away by investing in both CDN Maverick and Ucore Rare 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 Ucore Rare 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 Ucore Rare Metals, you can compare the effects of market volatilities on CDN Maverick and Ucore Rare 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 Ucore Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Ucore Rare.

Diversification Opportunities for CDN Maverick and Ucore Rare

0.01

Correlation Coefficient

CDN Maverick  Ucore Rare

Significant diversification

The 3 months correlation between CDN and Ucore is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Ucore Rare Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucore Rare Metals 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 Ucore Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ucore Rare Metals has no effect on the direction of CDN Maverick i.e., CDN Maverick and Ucore Rare go up and down completely randomly.

Pair Corralation between CDN Maverick and Ucore Rare

Assuming the 90 days horizon CDN Maverick Capital is expected to under-perform the Ucore Rare. In addition to that, CDN Maverick is 1.71 times more volatile than Ucore Rare Metals. It trades about -0.02 of its total potential returns per unit of risk. Ucore Rare Metals is currently generating about -0.01 per unit of volatility. If you would invest  94.00  in Ucore Rare Metals on December 1, 2024 and sell it today you would lose (43.00) from holding Ucore Rare Metals or give up 45.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

CDN Maverick Capital  vs.  Ucore Rare Metals

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 8 (%) 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.

Ucore Rare Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ucore Rare Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ucore Rare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CDN Maverick and Ucore Rare

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

The idea behind CDN Maverick Capital and Ucore Rare Metals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.