Correlation Between Commander Resources and Stelmine Canada

Can any of the company-specific risk be diversified away by investing in both Commander Resources and Stelmine Canada 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 Commander Resources and Stelmine Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Commander Resources and Stelmine Canada, you can compare the effects of market volatilities on Commander Resources and Stelmine Canada 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 Commander Resources with a short position of Stelmine Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commander Resources and Stelmine Canada.

Diversification Opportunities for Commander Resources and Stelmine Canada

-0.02

Correlation Coefficient

Commander Resources  Stelmine Canada

Good diversification

The 3 months correlation between Commander and Stelmine is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Commander Resources and Stelmine Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelmine Canada and Commander Resources 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 Commander Resources are associated (or correlated) with Stelmine Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelmine Canada has no effect on the direction of Commander Resources i.e., Commander Resources and Stelmine Canada go up and down completely randomly.

Pair Corralation between Commander Resources and Stelmine Canada

Assuming the 90 days horizon Commander Resources is expected to generate 6.15 times less return on investment than Stelmine Canada. But when comparing it to its historical volatility, Commander Resources is 2.68 times less risky than Stelmine Canada. It trades about 0.03 of its potential returns per unit of risk. Stelmine Canada is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Stelmine Canada on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Stelmine Canada or generate 0.0% return on investment over 90 days.

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

Commander Resources  vs.  Stelmine Canada

Commander Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Commander Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Commander Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Stelmine Canada

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stelmine Canada are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Stelmine Canada showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Commander Resources and Stelmine Canada

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

The idea behind Commander Resources and Stelmine Canada 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.