Correlation Between Canso Select and Globex Mining

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

By analyzing existing cross correlation between Canso Select Opportunities and Globex Mining Enterprises, you can compare the effects of market volatilities on Canso Select and Globex Mining 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 Canso Select with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canso Select and Globex Mining.

Diversification Opportunities for Canso Select and Globex Mining

-0.21

Correlation Coefficient

Canso Select  Globex Mining

Very good diversification

The 3 months correlation between Canso and Globex is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Canso Select Opportunities and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and Canso Select 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 Canso Select Opportunities are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Canso Select i.e., Canso Select and Globex Mining go up and down completely randomly.

Pair Corralation between Canso Select and Globex Mining

Assuming the 90 days trading horizon Canso Select is expected to generate 21.51 times less return on investment than Globex Mining. But when comparing it to its historical volatility, Canso Select Opportunities is 1.6 times less risky than Globex Mining. It trades about 0.01 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  118.00  in Globex Mining Enterprises on December 30, 2024 and sell it today you would earn a total of  28.00  from holding Globex Mining Enterprises or generate 23.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Canso Select Opportunities  vs.  Globex Mining Enterprises

Canso Select Opportu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canso Select Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Canso Select is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Globex Mining Enterprises

Risk-Adjusted Performance

OK

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

Pair Trading with Canso Select and Globex Mining

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

The idea behind Canso Select Opportunities and Globex Mining Enterprises 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.