Correlation Between Black Mammoth and Hawkeye Gold

Can any of the company-specific risk be diversified away by investing in both Black Mammoth and Hawkeye Gold 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 Black Mammoth and Hawkeye Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Black Mammoth Metals and Hawkeye Gold and, you can compare the effects of market volatilities on Black Mammoth and Hawkeye Gold 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 Black Mammoth with a short position of Hawkeye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Mammoth and Hawkeye Gold.

Diversification Opportunities for Black Mammoth and Hawkeye Gold

-0.07

Correlation Coefficient

Black Mammoth  Hawkeye Gold

Good diversification

The 3 months correlation between Black and Hawkeye is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Black Mammoth Metals and Hawkeye Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkeye Gold and Black Mammoth 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 Black Mammoth Metals are associated (or correlated) with Hawkeye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkeye Gold has no effect on the direction of Black Mammoth i.e., Black Mammoth and Hawkeye Gold go up and down completely randomly.

Pair Corralation between Black Mammoth and Hawkeye Gold

Assuming the 90 days horizon Black Mammoth Metals is expected to generate 0.76 times more return on investment than Hawkeye Gold. However, Black Mammoth Metals is 1.31 times less risky than Hawkeye Gold. It trades about 0.15 of its potential returns per unit of risk. Hawkeye Gold and is currently generating about 0.06 per unit of risk. If you would invest  9.00  in Black Mammoth Metals on September 17, 2024 and sell it today you would earn a total of  85.00  from holding Black Mammoth Metals or generate 944.44% return on investment over 90 days.

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

Black Mammoth Metals  vs.  Hawkeye Gold and

Black Mammoth Metals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Black Mammoth Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Black Mammoth showed solid returns over the last few months and may actually be approaching a breakup point.

Hawkeye Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkeye Gold and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hawkeye Gold is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Black Mammoth and Hawkeye Gold

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

The idea behind Black Mammoth Metals and Hawkeye Gold and 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.