Correlation Between GALENA MINING and RED HILL

Can any of the company-specific risk be diversified away by investing in both GALENA MINING and RED HILL 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 RED HILL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GALENA MINING LTD and RED HILL IRON, you can compare the effects of market volatilities on GALENA MINING and RED HILL 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 RED HILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and RED HILL.

Diversification Opportunities for GALENA MINING and RED HILL

1.0

Correlation Coefficient

GALENA MINING  RED HILL

No risk reduction

The 3 months correlation between GALENA and RED is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and RED HILL IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RED HILL IRON 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 LTD are associated (or correlated) with RED HILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RED HILL IRON has no effect on the direction of GALENA MINING i.e., GALENA MINING and RED HILL go up and down completely randomly.

Pair Corralation between GALENA MINING and RED HILL

If you would invest  18.00  in RED HILL IRON on October 26, 2024 and sell it today you would earn a total of  0.00  from holding RED HILL IRON or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.19%
Values	Daily Returns

GALENA MINING LTD  vs.  RED HILL IRON

GALENA MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

RED HILL IRON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RED HILL IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, RED HILL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GALENA MINING and RED HILL

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

The idea behind GALENA MINING LTD and RED HILL IRON 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.