Correlation Between Heliostar Metals and K92 Mining

Can any of the company-specific risk be diversified away by investing in both Heliostar Metals and K92 Mining 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 Heliostar Metals and K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heliostar Metals and K92 Mining, you can compare the effects of market volatilities on Heliostar Metals and K92 Mining 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 Heliostar Metals with a short position of K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heliostar Metals and K92 Mining.

Diversification Opportunities for Heliostar Metals and K92 Mining

0.66

Correlation Coefficient

Heliostar Metals  K92 Mining

Poor diversification

The 3 months correlation between Heliostar and K92 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Heliostar Metals and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining and Heliostar Metals 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 Heliostar Metals are associated (or correlated) with K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Heliostar Metals i.e., Heliostar Metals and K92 Mining go up and down completely randomly.

Pair Corralation between Heliostar Metals and K92 Mining

Assuming the 90 days horizon Heliostar Metals is expected to generate 1.64 times more return on investment than K92 Mining. However, Heliostar Metals is 1.64 times more volatile than K92 Mining. It trades about 0.15 of its potential returns per unit of risk. K92 Mining is currently generating about 0.06 per unit of risk. If you would invest  30.00  in Heliostar Metals on September 15, 2024 and sell it today you would earn a total of  15.00  from holding Heliostar Metals or generate 50.0% return on investment over 90 days.

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

Heliostar Metals  vs.  K92 Mining

Heliostar Metals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heliostar Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Heliostar Metals reported solid returns over the last few months and may actually be approaching a breakup point.

K92 Mining

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, K92 Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Heliostar Metals and K92 Mining

The main advantage of trading using opposite Heliostar Metals and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heliostar Metals position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining's long position.

The idea behind Heliostar Metals and K92 Mining 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.