Correlation Between Cariboo Rose and Pace Metals

Can any of the company-specific risk be diversified away by investing in both Cariboo Rose and Pace Metals 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 Cariboo Rose and Pace Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Cariboo Rose and Pace Metals

-0.32

Correlation Coefficient

Cariboo Rose  Pace Metals

Very good diversification

The 3 months correlation between Cariboo and Pace is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cariboo Rose Resources and Pace Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Metals and Cariboo Rose 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 Cariboo Rose Resources are associated (or correlated) with Pace Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Metals has no effect on the direction of Cariboo Rose i.e., Cariboo Rose and Pace Metals go up and down completely randomly.

Pair Corralation between Cariboo Rose and Pace Metals

If you would invest  4.00  in Cariboo Rose Resources on October 12, 2024 and sell it today you would earn a total of  1.00  from holding Cariboo Rose Resources or generate 25.0% return on investment over 90 days.

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

Cariboo Rose Resources  vs.  Pace Metals

Cariboo Rose Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cariboo Rose Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cariboo Rose showed solid returns over the last few months and may actually be approaching a breakup point.

Pace Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pace Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Cariboo Rose and Pace Metals

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

The idea behind Cariboo Rose Resources and Pace 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.