Correlation Between Eskay Mining and Stillwater Critical

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

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

Diversification Opportunities for Eskay Mining and Stillwater Critical

-0.49

Correlation Coefficient

Eskay Mining  Stillwater Critical

Very good diversification

The 3 months correlation between Eskay and Stillwater is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and Stillwater Critical Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillwater Critical and Eskay Mining 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 Eskay Mining Corp are associated (or correlated) with Stillwater Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillwater Critical has no effect on the direction of Eskay Mining i.e., Eskay Mining and Stillwater Critical go up and down completely randomly.

Pair Corralation between Eskay Mining and Stillwater Critical

Assuming the 90 days horizon Eskay Mining Corp is expected to generate 1.07 times more return on investment than Stillwater Critical. However, Eskay Mining is 1.07 times more volatile than Stillwater Critical Minerals. It trades about 0.23 of its potential returns per unit of risk. Stillwater Critical Minerals is currently generating about -0.3 per unit of risk. If you would invest  19.00  in Eskay Mining Corp on December 4, 2024 and sell it today you would earn a total of  4.00  from holding Eskay Mining Corp or generate 21.05% return on investment over 90 days.

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

Eskay Mining Corp  vs.  Stillwater Critical Minerals

Eskay Mining Corp

Risk-Adjusted Performance

OK

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

Stillwater Critical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stillwater Critical Minerals 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 basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Eskay Mining and Stillwater Critical

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

The idea behind Eskay Mining Corp and Stillwater Critical Minerals 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.