Correlation Between Edison Cobalt and Almonty Industries
Can any of the company-specific risk be diversified away by investing in both Edison Cobalt and Almonty Industries 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 Edison Cobalt and Almonty Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edison Cobalt Corp and Almonty Industries, you can compare the effects of market volatilities on Edison Cobalt and Almonty Industries 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 Edison Cobalt with a short position of Almonty Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edison Cobalt and Almonty Industries.
Diversification Opportunities for Edison Cobalt and Almonty Industries
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Edison and Almonty is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Edison Cobalt Corp and Almonty Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almonty Industries and Edison Cobalt 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 Edison Cobalt Corp are associated (or correlated) with Almonty Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almonty Industries has no effect on the direction of Edison Cobalt i.e., Edison Cobalt and Almonty Industries go up and down completely randomly.
Pair Corralation between Edison Cobalt and Almonty Industries
Assuming the 90 days horizon Edison Cobalt Corp is expected to generate 4.04 times more return on investment than Almonty Industries. However, Edison Cobalt is 4.04 times more volatile than Almonty Industries. It trades about 0.05 of its potential returns per unit of risk. Almonty Industries is currently generating about 0.05 per unit of risk. If you would invest 8.11 in Edison Cobalt Corp on September 12, 2024 and sell it today you would lose (0.78) from holding Edison Cobalt Corp or give up 9.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Edison Cobalt Corp vs. Almonty Industries
Performance |
Timeline |
Edison Cobalt Corp |
Almonty Industries |
Edison Cobalt and Almonty Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Edison Cobalt and Almonty Industries
The main advantage of trading using opposite Edison Cobalt and Almonty Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edison Cobalt position performs unexpectedly, Almonty Industries 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 Almonty Industries will offset losses from the drop in Almonty Industries' long position.Edison Cobalt vs. Baroyeca Gold Silver | Edison Cobalt vs. Aurelia Metals Limited | Edison Cobalt vs. China Rare Earth | Edison Cobalt vs. Champion Bear Resources |
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Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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