Correlation Between GALENA MINING and URBAN OUTFITTERS

Can any of the company-specific risk be diversified away by investing in both GALENA MINING and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on GALENA MINING and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and URBAN OUTFITTERS.

Diversification Opportunities for GALENA MINING and URBAN OUTFITTERS

0.0

Correlation Coefficient

GALENA MINING  URBAN OUTFITTERS

Pay attention - limited upside

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

Pair Corralation between GALENA MINING and URBAN OUTFITTERS

Assuming the 90 days horizon GALENA MINING LTD is expected to under-perform the URBAN OUTFITTERS. In addition to that, GALENA MINING is 2.47 times more volatile than URBAN OUTFITTERS. It trades about -0.01 of its total potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.07 per unit of volatility. If you would invest  2,525  in URBAN OUTFITTERS on December 2, 2024 and sell it today you would earn a total of  2,925  from holding URBAN OUTFITTERS or generate 115.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

GALENA MINING LTD  vs.  URBAN OUTFITTERS

GALENA MINING LTD

Risk-Adjusted Performance

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.

URBAN OUTFITTERS

Risk-Adjusted Performance

OK

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

Pair Trading with GALENA MINING and URBAN OUTFITTERS

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

The idea behind GALENA MINING LTD and URBAN OUTFITTERS 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.