Correlation Between Cantex Mine and Spanish Mountain

Can any of the company-specific risk be diversified away by investing in both Cantex Mine and Spanish Mountain 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 Spanish Mountain 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 Spanish Mountain Gold, you can compare the effects of market volatilities on Cantex Mine and Spanish Mountain 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 Spanish Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Spanish Mountain.

Diversification Opportunities for Cantex Mine and Spanish Mountain

0.13

Correlation Coefficient

Cantex Mine  Spanish Mountain

Average diversification

The 3 months correlation between Cantex and Spanish is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain Gold 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 Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of Cantex Mine i.e., Cantex Mine and Spanish Mountain go up and down completely randomly.

Pair Corralation between Cantex Mine and Spanish Mountain

Assuming the 90 days horizon Cantex Mine Development is expected to generate 1.17 times more return on investment than Spanish Mountain. However, Cantex Mine is 1.17 times more volatile than Spanish Mountain Gold. It trades about -0.02 of its potential returns per unit of risk. Spanish Mountain Gold is currently generating about -0.02 per unit of risk. If you would invest  10.00  in Cantex Mine Development on October 26, 2024 and sell it today you would lose (2.39) from holding Cantex Mine Development or give up 23.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Cantex Mine Development  vs.  Spanish Mountain Gold

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 latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Spanish Mountain Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spanish Mountain Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Cantex Mine and Spanish Mountain

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

The idea behind Cantex Mine Development and Spanish Mountain Gold 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.