Correlation Between Galena Mining and Vulcan Energy

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

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

Diversification Opportunities for Galena Mining and Vulcan Energy

0.0

Correlation Coefficient

Galena Mining  Vulcan Energy

Pay attention - limited upside

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

Pair Corralation between Galena Mining and Vulcan Energy

If you would invest  5.90  in Galena Mining on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Galena Mining or generate 0.0% return on investment over 90 days.

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

Galena Mining  vs.  Vulcan Energy Resources

Galena Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galena Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Galena Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Vulcan Energy Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Energy Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Vulcan Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galena Mining and Vulcan Energy

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

The idea behind Galena Mining and Vulcan Energy Resources 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 Transaction History module to view history of all your transactions and understand their impact on performance.