Correlation Between CHKEZ Old and Spanish Mountain

Can any of the company-specific risk be diversified away by investing in both CHKEZ Old and Spanish Mountain 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 CHKEZ Old and Spanish Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for CHKEZ Old and Spanish Mountain

0.0

Correlation Coefficient

CHKEZ Old  Spanish Mountain

Pay attention - limited upside

The 3 months correlation between CHKEZ and Spanish is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHKEZ Old and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain Gold and CHKEZ 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 CHKEZ Old are associated (or correlated) with Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of CHKEZ Old i.e., CHKEZ Old and Spanish Mountain go up and down completely randomly.

Pair Corralation between CHKEZ Old and Spanish Mountain

Assuming the 90 days horizon CHKEZ Old is expected to under-perform the Spanish Mountain. But the stock apears to be less risky and, when comparing its historical volatility, CHKEZ Old is 2.76 times less risky than Spanish Mountain. The stock trades about -0.01 of its potential returns per unit of risk. The Spanish Mountain Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Spanish Mountain Gold on October 9, 2024 and sell it today you would lose (5.00) from holding Spanish Mountain Gold or give up 38.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	87.25%
Values	Daily Returns

CHKEZ Old  vs.  Spanish Mountain Gold

CHKEZ Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, CHKEZ Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Spanish Mountain Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spanish Mountain Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CHKEZ Old and Spanish Mountain

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

The idea behind CHKEZ Old and Spanish Mountain Gold 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 CEOs Directory module to screen CEOs from public companies around the world.