Correlation Between IMetal Resources and Arizona Sonoran

Can any of the company-specific risk be diversified away by investing in both IMetal Resources and Arizona Sonoran 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 IMetal Resources and Arizona Sonoran into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iMetal Resources and Arizona Sonoran Copper, you can compare the effects of market volatilities on IMetal Resources and Arizona Sonoran 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 IMetal Resources with a short position of Arizona Sonoran. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMetal Resources and Arizona Sonoran.

Diversification Opportunities for IMetal Resources and Arizona Sonoran

0.58

Correlation Coefficient

IMetal Resources  Arizona Sonoran

Very weak diversification

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

Pair Corralation between IMetal Resources and Arizona Sonoran

Assuming the 90 days horizon iMetal Resources is expected to generate 2.72 times more return on investment than Arizona Sonoran. However, IMetal Resources is 2.72 times more volatile than Arizona Sonoran Copper. It trades about -0.01 of its potential returns per unit of risk. Arizona Sonoran Copper is currently generating about -0.04 per unit of risk. If you would invest  27.00  in iMetal Resources on September 13, 2024 and sell it today you would lose (5.00) from holding iMetal Resources or give up 18.52% of portfolio value over 90 days.

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

iMetal Resources  vs.  Arizona Sonoran Copper

iMetal Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Arizona Sonoran Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arizona Sonoran Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with IMetal Resources and Arizona Sonoran

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

The idea behind iMetal Resources and Arizona Sonoran Copper 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.