Correlation Between BC IRON and Globex Mining

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

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

Diversification Opportunities for BC IRON and Globex Mining

-0.15

Correlation Coefficient

BC IRON  Globex Mining

Good diversification

The 3 months correlation between BC3 and Globex is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding BC IRON and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and BC IRON 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 BC IRON are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of BC IRON i.e., BC IRON and Globex Mining go up and down completely randomly.

Pair Corralation between BC IRON and Globex Mining

Assuming the 90 days trading horizon BC IRON is expected to under-perform the Globex Mining. But the stock apears to be less risky and, when comparing its historical volatility, BC IRON is 1.05 times less risky than Globex Mining. The stock trades about -0.09 of its potential returns per unit of risk. The Globex Mining Enterprises is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  76.00  in Globex Mining Enterprises on December 21, 2024 and sell it today you would earn a total of  24.00  from holding Globex Mining Enterprises or generate 31.58% return on investment over 90 days.

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

BC IRON  vs.  Globex Mining Enterprises

BC IRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days BC IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Globex Mining Enterprises

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Globex Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BC IRON and Globex Mining

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

The idea behind BC IRON and Globex Mining Enterprises 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.