Correlation Between Eagle Plains and Giga Metals

Can any of the company-specific risk be diversified away by investing in both Eagle Plains and Giga Metals 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 Eagle Plains and Giga Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagle Plains Resources and Giga Metals, you can compare the effects of market volatilities on Eagle Plains and Giga Metals 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 Eagle Plains with a short position of Giga Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Plains and Giga Metals.

Diversification Opportunities for Eagle Plains and Giga Metals

0.0

Correlation Coefficient

Eagle Plains  Giga Metals

Pay attention - limited upside

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

Pair Corralation between Eagle Plains and Giga Metals

If you would invest  6.00  in Eagle Plains Resources on December 27, 2024 and sell it today you would earn a total of  3.00  from holding Eagle Plains Resources or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eagle Plains Resources  vs.  Giga Metals

Eagle Plains Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Plains Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Eagle Plains reported solid returns over the last few months and may actually be approaching a breakup point.

Giga Metals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Eagle Plains and Giga Metals

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

The idea behind Eagle Plains Resources and Giga Metals 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.