Correlation Between Heliostar Metals and Omineca Mining

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

Diversification Opportunities for Heliostar Metals and Omineca Mining

-0.58

Correlation Coefficient

Heliostar Metals  Omineca Mining

Excellent diversification

The 3 months correlation between Heliostar and Omineca is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Heliostar Metals and Omineca Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omineca 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 Omineca Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omineca Mining has no effect on the direction of Heliostar Metals i.e., Heliostar Metals and Omineca Mining go up and down completely randomly.

Pair Corralation between Heliostar Metals and Omineca Mining

Assuming the 90 days horizon Heliostar Metals is expected to generate 0.56 times more return on investment than Omineca Mining. However, Heliostar Metals is 1.8 times less risky than Omineca Mining. It trades about 0.19 of its potential returns per unit of risk. Omineca Mining and is currently generating about -0.04 per unit of risk. If you would invest  41.00  in Heliostar Metals on November 20, 2024 and sell it today you would earn a total of  23.00  from holding Heliostar Metals or generate 56.1% return on investment over 90 days.

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

Heliostar Metals  vs.  Omineca Mining and

Heliostar Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heliostar Metals are ranked lower than 15 (%) 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.

Omineca Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Omineca Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Heliostar Metals and Omineca Mining

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

The idea behind Heliostar Metals and Omineca Mining and 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.