Correlation Between Enerev5 Metals and IShares Canadian

Can any of the company-specific risk be diversified away by investing in both Enerev5 Metals and IShares Canadian 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 Enerev5 Metals and IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enerev5 Metals and iShares Canadian HYBrid, you can compare the effects of market volatilities on Enerev5 Metals and IShares Canadian 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 Enerev5 Metals with a short position of IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerev5 Metals and IShares Canadian.

Diversification Opportunities for Enerev5 Metals and IShares Canadian

-0.15

Correlation Coefficient

Enerev5 Metals  IShares Canadian

Good diversification

The 3 months correlation between Enerev5 and IShares is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enerev5 Metals and iShares Canadian HYBrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian HYBrid and Enerev5 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 Enerev5 Metals are associated (or correlated) with IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian HYBrid has no effect on the direction of Enerev5 Metals i.e., Enerev5 Metals and IShares Canadian go up and down completely randomly.

Pair Corralation between Enerev5 Metals and IShares Canadian

Assuming the 90 days trading horizon Enerev5 Metals is not expected to generate positive returns. Moreover, Enerev5 Metals is 24.45 times more volatile than iShares Canadian HYBrid. It trades away all of its potential returns to assume current level of volatility. iShares Canadian HYBrid is currently generating about 0.17 per unit of risk. If you would invest  1,730  in iShares Canadian HYBrid on October 5, 2024 and sell it today you would earn a total of  251.00  from holding iShares Canadian HYBrid or generate 14.51% return on investment over 90 days.

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

Enerev5 Metals  vs.  iShares Canadian HYBrid

Enerev5 Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enerev5 Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

iShares Canadian HYBrid

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Canadian HYBrid are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Enerev5 Metals and IShares Canadian

The main advantage of trading using opposite Enerev5 Metals and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerev5 Metals position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.

The idea behind Enerev5 Metals and iShares Canadian HYBrid 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.