Correlation Between CHKEL Old and Orosur Mining

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Can any of the company-specific risk be diversified away by investing in both CHKEL Old and Orosur 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 CHKEL Old and Orosur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHKEL Old and Orosur Mining, you can compare the effects of market volatilities on CHKEL Old and Orosur 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 CHKEL Old with a short position of Orosur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHKEL Old and Orosur Mining.

Diversification Opportunities for CHKEL Old and Orosur Mining

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between CHKEL and Orosur is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CHKEL Old and Orosur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orosur Mining and CHKEL Old 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 CHKEL Old are associated (or correlated) with Orosur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orosur Mining has no effect on the direction of CHKEL Old i.e., CHKEL Old and Orosur Mining go up and down completely randomly.

Pair Corralation between CHKEL Old and Orosur Mining

Assuming the 90 days horizon CHKEL Old is expected to under-perform the Orosur Mining. But the stock apears to be less risky and, when comparing its historical volatility, CHKEL Old is 20.79 times less risky than Orosur Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Orosur Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7.50  in Orosur Mining on October 10, 2024 and sell it today you would earn a total of  3.50  from holding Orosur Mining or generate 46.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy86.67%
ValuesDaily Returns

CHKEL Old  vs.  Orosur Mining

 Performance 
       Timeline  
CHKEL Old 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CHKEL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, CHKEL Old is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
Orosur Mining 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Orosur Mining are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Orosur Mining reported solid returns over the last few months and may actually be approaching a breakup point.

CHKEL Old and Orosur Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CHKEL Old and Orosur Mining

The main advantage of trading using opposite CHKEL Old and Orosur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHKEL Old position performs unexpectedly, Orosur 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 Orosur Mining will offset losses from the drop in Orosur Mining's long position.
The idea behind CHKEL Old and Orosur Mining 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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