Correlation Between E79 Resources and Generation Mining

Can any of the company-specific risk be diversified away by investing in both E79 Resources and Generation 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 E79 Resources and Generation Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E79 Resources Corp and Generation Mining Limited, you can compare the effects of market volatilities on E79 Resources and Generation 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 E79 Resources with a short position of Generation Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of E79 Resources and Generation Mining.

Diversification Opportunities for E79 Resources and Generation Mining

-0.1

Correlation Coefficient

E79 Resources  Generation Mining

Good diversification

The 3 months correlation between E79 and Generation is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding E79 Resources Corp and Generation Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Mining and E79 Resources 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 E79 Resources Corp are associated (or correlated) with Generation Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Mining has no effect on the direction of E79 Resources i.e., E79 Resources and Generation Mining go up and down completely randomly.

Pair Corralation between E79 Resources and Generation Mining

Assuming the 90 days horizon E79 Resources Corp is expected to generate 0.53 times more return on investment than Generation Mining. However, E79 Resources Corp is 1.87 times less risky than Generation Mining. It trades about 0.32 of its potential returns per unit of risk. Generation Mining Limited is currently generating about -0.19 per unit of risk. If you would invest  11.00  in E79 Resources Corp on December 4, 2024 and sell it today you would earn a total of  2.00  from holding E79 Resources Corp or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

E79 Resources Corp  vs.  Generation Mining Limited

E79 Resources Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E79 Resources Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, E79 Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Generation Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Generation Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with E79 Resources and Generation Mining

The main advantage of trading using opposite E79 Resources and Generation Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E79 Resources position performs unexpectedly, Generation 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 Generation Mining will offset losses from the drop in Generation Mining's long position.

The idea behind E79 Resources Corp and Generation Mining Limited 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.