Correlation Between SIERRA METALS and GREEN MINERALS

Can any of the company-specific risk be diversified away by investing in both SIERRA METALS and GREEN MINERALS 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 SIERRA METALS and GREEN MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIERRA METALS and GREEN MINERALS NK, you can compare the effects of market volatilities on SIERRA METALS and GREEN MINERALS 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 SIERRA METALS with a short position of GREEN MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIERRA METALS and GREEN MINERALS.

Diversification Opportunities for SIERRA METALS and GREEN MINERALS

0.0

Correlation Coefficient

SIERRA METALS  GREEN MINERALS

Pay attention - limited upside

The 3 months correlation between SIERRA and GREEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SIERRA METALS and GREEN MINERALS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREEN MINERALS NK and SIERRA METALS 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 SIERRA METALS are associated (or correlated) with GREEN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREEN MINERALS NK has no effect on the direction of SIERRA METALS i.e., SIERRA METALS and GREEN MINERALS go up and down completely randomly.

Pair Corralation between SIERRA METALS and GREEN MINERALS

Assuming the 90 days trading horizon SIERRA METALS is expected to generate 0.33 times more return on investment than GREEN MINERALS. However, SIERRA METALS is 3.04 times less risky than GREEN MINERALS. It trades about 0.21 of its potential returns per unit of risk. GREEN MINERALS NK is currently generating about -0.03 per unit of risk. If you would invest  49.00  in SIERRA METALS on October 9, 2024 and sell it today you would earn a total of  5.00  from holding SIERRA METALS or generate 10.2% return on investment over 90 days.

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

SIERRA METALS  vs.  GREEN MINERALS NK

SIERRA METALS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIERRA METALS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SIERRA METALS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

GREEN MINERALS NK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREEN MINERALS NK 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SIERRA METALS and GREEN MINERALS

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

The idea behind SIERRA METALS and GREEN MINERALS NK 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 Transaction History module to view history of all your transactions and understand their impact on performance.