Correlation Between Champion Iron and Staude Capital

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

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

Diversification Opportunities for Champion Iron and Staude Capital

-0.07

Correlation Coefficient

Champion Iron  Staude Capital

Good diversification

The 3 months correlation between Champion and Staude is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Staude Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staude Capital Global and Champion Iron 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 Champion Iron are associated (or correlated) with Staude Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staude Capital Global has no effect on the direction of Champion Iron i.e., Champion Iron and Staude Capital go up and down completely randomly.

Pair Corralation between Champion Iron and Staude Capital

Assuming the 90 days trading horizon Champion Iron is expected to under-perform the Staude Capital. In addition to that, Champion Iron is 1.7 times more volatile than Staude Capital Global. It trades about -0.06 of its total potential returns per unit of risk. Staude Capital Global is currently generating about 0.04 per unit of volatility. If you would invest  135.00  in Staude Capital Global on December 23, 2024 and sell it today you would earn a total of  4.00  from holding Staude Capital Global or generate 2.96% return on investment over 90 days.

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

Champion Iron  vs.  Staude Capital Global

Champion Iron

Risk-Adjusted Performance

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 uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Staude Capital Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Staude Capital Global are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Staude Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Champion Iron and Staude Capital

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

The idea behind Champion Iron and Staude Capital Global 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.