Correlation Between Commerce Resources and Group Ten

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

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

Diversification Opportunities for Commerce Resources and Group Ten

-0.02

Correlation Coefficient

Commerce Resources  Group Ten

Good diversification

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

Pair Corralation between Commerce Resources and Group Ten

Assuming the 90 days horizon Commerce Resources Corp is expected to under-perform the Group Ten. In addition to that, Commerce Resources is 1.06 times more volatile than Group Ten Metals. It trades about -0.05 of its total potential returns per unit of risk. Group Ten Metals is currently generating about -0.03 per unit of volatility. If you would invest  8.00  in Group Ten Metals on December 3, 2024 and sell it today you would lose (1.00) from holding Group Ten Metals or give up 12.5% of portfolio value over 90 days.

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

Commerce Resources Corp  vs.  Group Ten Metals

Commerce Resources Corp

Risk-Adjusted Performance

Insignificant

Over the last 90 days Commerce Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Commerce Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Group Ten Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Group Ten Metals 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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Commerce Resources and Group Ten

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

The idea behind Commerce Resources Corp and Group Ten Metals 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.