Correlation Between CHKEZ Old and Searchlight Minerals

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

By analyzing existing cross correlation between CHKEZ Old and Searchlight Minerals Corp, you can compare the effects of market volatilities on CHKEZ Old and Searchlight Minerals 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 Searchlight Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHKEZ Old and Searchlight Minerals.

Diversification Opportunities for CHKEZ Old and Searchlight Minerals

0.44

Correlation Coefficient

CHKEZ Old  Searchlight Minerals

Very weak diversification

The 3 months correlation between CHKEZ and Searchlight is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CHKEZ Old and Searchlight Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Searchlight Minerals Corp 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 Searchlight Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Searchlight Minerals Corp has no effect on the direction of CHKEZ Old i.e., CHKEZ Old and Searchlight Minerals go up and down completely randomly.

Pair Corralation between CHKEZ Old and Searchlight Minerals

If you would invest  0.43  in Searchlight Minerals Corp on October 27, 2024 and sell it today you would lose (0.03) from holding Searchlight Minerals Corp or give up 6.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

CHKEZ Old  vs.  Searchlight Minerals Corp

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.

Searchlight Minerals Corp

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Searchlight Minerals Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Searchlight Minerals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHKEZ Old and Searchlight Minerals

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

The idea behind CHKEZ Old and Searchlight Minerals Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.