Correlation Between Condor Energies and Champion Iron

Can any of the company-specific risk be diversified away by investing in both Condor Energies and Champion Iron 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 Condor Energies and Champion Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Condor Energies and Champion Iron, you can compare the effects of market volatilities on Condor Energies and Champion Iron 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 Condor Energies with a short position of Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Condor Energies and Champion Iron.

Diversification Opportunities for Condor Energies and Champion Iron

-0.09

Correlation Coefficient

Condor Energies  Champion Iron

Good diversification

The 3 months correlation between Condor and Champion is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Condor Energies and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron and Condor Energies 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 Condor Energies are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of Condor Energies i.e., Condor Energies and Champion Iron go up and down completely randomly.

Pair Corralation between Condor Energies and Champion Iron

Assuming the 90 days trading horizon Condor Energies is expected to generate 2.76 times more return on investment than Champion Iron. However, Condor Energies is 2.76 times more volatile than Champion Iron. It trades about 0.09 of its potential returns per unit of risk. Champion Iron is currently generating about -0.01 per unit of risk. If you would invest  32.00  in Condor Energies on October 9, 2024 and sell it today you would earn a total of  163.00  from holding Condor Energies or generate 509.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Condor Energies  vs.  Champion Iron

Condor Energies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Condor Energies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Condor Energies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Champion Iron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champion Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Condor Energies and Champion Iron

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

The idea behind Condor Energies and Champion Iron 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.

Check out your portfolio center.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.