Correlation Between Cantex Mine and IMPACT Silver

Can any of the company-specific risk be diversified away by investing in both Cantex Mine and IMPACT Silver 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 Cantex Mine and IMPACT Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cantex Mine Development and IMPACT Silver Corp, you can compare the effects of market volatilities on Cantex Mine and IMPACT Silver 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 Cantex Mine with a short position of IMPACT Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and IMPACT Silver.

Diversification Opportunities for Cantex Mine and IMPACT Silver

0.15

Correlation Coefficient

Cantex Mine  IMPACT Silver

Average diversification

The 3 months correlation between Cantex and IMPACT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and IMPACT Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPACT Silver Corp and Cantex Mine 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 Cantex Mine Development are associated (or correlated) with IMPACT Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPACT Silver Corp has no effect on the direction of Cantex Mine i.e., Cantex Mine and IMPACT Silver go up and down completely randomly.

Pair Corralation between Cantex Mine and IMPACT Silver

Assuming the 90 days horizon Cantex Mine Development is expected to under-perform the IMPACT Silver. In addition to that, Cantex Mine is 1.38 times more volatile than IMPACT Silver Corp. It trades about -0.11 of its total potential returns per unit of risk. IMPACT Silver Corp is currently generating about -0.12 per unit of volatility. If you would invest  17.00  in IMPACT Silver Corp on October 9, 2024 and sell it today you would lose (2.00) from holding IMPACT Silver Corp or give up 11.76% of portfolio value over 90 days.

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

Cantex Mine Development  vs.  IMPACT Silver Corp

Cantex Mine Development

Risk-Adjusted Performance

0 of 100

Very Weak

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

IMPACT Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cantex Mine and IMPACT Silver

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

The idea behind Cantex Mine Development and IMPACT Silver Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.