Correlation Between Chester Mining and Crown LNG

Can any of the company-specific risk be diversified away by investing in both Chester Mining and Crown LNG 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 Chester Mining and Crown LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chester Mining and Crown LNG Holdings, you can compare the effects of market volatilities on Chester Mining and Crown LNG 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 Chester Mining with a short position of Crown LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chester Mining and Crown LNG.

Diversification Opportunities for Chester Mining and Crown LNG

0.0

Correlation Coefficient

Chester Mining  Crown LNG

Pay attention - limited upside

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

Pair Corralation between Chester Mining and Crown LNG

If you would invest  3.45  in Crown LNG Holdings on December 26, 2024 and sell it today you would earn a total of  0.07  from holding Crown LNG Holdings or generate 2.03% return on investment over 90 days.

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

Chester Mining  vs.  Crown LNG Holdings

Chester Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chester Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Chester Mining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Crown LNG Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crown LNG Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Crown LNG showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chester Mining and Crown LNG

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

The idea behind Chester Mining and Crown LNG Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.