Correlation Between Hawkeye Gold and Black Mammoth

Can any of the company-specific risk be diversified away by investing in both Hawkeye Gold and Black Mammoth 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 Hawkeye Gold and Black Mammoth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hawkeye Gold and and Black Mammoth Metals, you can compare the effects of market volatilities on Hawkeye Gold and Black Mammoth 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 Hawkeye Gold with a short position of Black Mammoth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkeye Gold and Black Mammoth.

Diversification Opportunities for Hawkeye Gold and Black Mammoth

-0.07

Correlation Coefficient

Hawkeye Gold  Black Mammoth

Good diversification

The 3 months correlation between Hawkeye and Black is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hawkeye Gold and and Black Mammoth Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Mammoth Metals and Hawkeye Gold 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 Hawkeye Gold and are associated (or correlated) with Black Mammoth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Mammoth Metals has no effect on the direction of Hawkeye Gold i.e., Hawkeye Gold and Black Mammoth go up and down completely randomly.

Pair Corralation between Hawkeye Gold and Black Mammoth

Assuming the 90 days trading horizon Hawkeye Gold is expected to generate 4.41 times less return on investment than Black Mammoth. In addition to that, Hawkeye Gold is 1.36 times more volatile than Black Mammoth Metals. It trades about 0.01 of its total potential returns per unit of risk. Black Mammoth Metals is currently generating about 0.06 per unit of volatility. If you would invest  85.00  in Black Mammoth Metals on September 17, 2024 and sell it today you would earn a total of  9.00  from holding Black Mammoth Metals or generate 10.59% return on investment over 90 days.

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

Hawkeye Gold and  vs.  Black Mammoth Metals

Hawkeye Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkeye Gold and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hawkeye Gold is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Black Mammoth Metals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Black Mammoth Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Black Mammoth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hawkeye Gold and Black Mammoth

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

The idea behind Hawkeye Gold and and Black Mammoth Metals 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.