Correlation Between Granite Creek and Applied Minerals

Can any of the company-specific risk be diversified away by investing in both Granite Creek and Applied Minerals 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 Granite Creek and Applied Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite Creek Copper and Applied Minerals, you can compare the effects of market volatilities on Granite Creek and Applied Minerals 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 Granite Creek with a short position of Applied Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Creek and Applied Minerals.

Diversification Opportunities for Granite Creek and Applied Minerals

0.0

Correlation Coefficient

Granite Creek  Applied Minerals

Pay attention - limited upside

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

Pair Corralation between Granite Creek and Applied Minerals

If you would invest  1.64  in Granite Creek Copper on September 3, 2024 and sell it today you would lose (0.22) from holding Granite Creek Copper or give up 13.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Granite Creek Copper  vs.  Applied Minerals

Granite Creek Copper

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Creek Copper are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Granite Creek may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Applied Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Applied Minerals is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Granite Creek and Applied Minerals

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

The idea behind Granite Creek Copper and Applied 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.