Correlation Between EMX Royalty and Vendetta Mining

Can any of the company-specific risk be diversified away by investing in both EMX Royalty and Vendetta Mining 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 EMX Royalty and Vendetta Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EMX Royalty Corp and Vendetta Mining Corp, you can compare the effects of market volatilities on EMX Royalty and Vendetta Mining 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 EMX Royalty with a short position of Vendetta Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMX Royalty and Vendetta Mining.

Diversification Opportunities for EMX Royalty and Vendetta Mining

0.01

Correlation Coefficient

EMX Royalty  Vendetta Mining

Significant diversification

The 3 months correlation between EMX and Vendetta is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding EMX Royalty Corp and Vendetta Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vendetta Mining Corp and EMX Royalty 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 EMX Royalty Corp are associated (or correlated) with Vendetta Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vendetta Mining Corp has no effect on the direction of EMX Royalty i.e., EMX Royalty and Vendetta Mining go up and down completely randomly.

Pair Corralation between EMX Royalty and Vendetta Mining

Considering the 90-day investment horizon EMX Royalty Corp is expected to under-perform the Vendetta Mining. But the stock apears to be less risky and, when comparing its historical volatility, EMX Royalty Corp is 5.08 times less risky than Vendetta Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Vendetta Mining Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.95  in Vendetta Mining Corp on October 4, 2024 and sell it today you would earn a total of  0.30  from holding Vendetta Mining Corp or generate 31.58% return on investment over 90 days.

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

EMX Royalty Corp  vs.  Vendetta Mining Corp

EMX Royalty Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMX Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, EMX Royalty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vendetta Mining Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vendetta Mining Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vendetta Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMX Royalty and Vendetta Mining

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

The idea behind EMX Royalty Corp and Vendetta Mining 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.