Correlation Between Intrepid Metals and Monitor Ventures

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

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

Diversification Opportunities for Intrepid Metals and Monitor Ventures

-0.03

Correlation Coefficient

Intrepid Metals  Monitor Ventures

Good diversification

The 3 months correlation between Intrepid and Monitor is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Metals Corp and Monitor Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monitor Ventures and Intrepid 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 Intrepid Metals Corp are associated (or correlated) with Monitor Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monitor Ventures has no effect on the direction of Intrepid Metals i.e., Intrepid Metals and Monitor Ventures go up and down completely randomly.

Pair Corralation between Intrepid Metals and Monitor Ventures

Assuming the 90 days horizon Intrepid Metals Corp is expected to under-perform the Monitor Ventures. In addition to that, Intrepid Metals is 5.69 times more volatile than Monitor Ventures. It trades about -0.01 of its total potential returns per unit of risk. Monitor Ventures is currently generating about 0.2 per unit of volatility. If you would invest  7.93  in Monitor Ventures on September 3, 2024 and sell it today you would earn a total of  1.07  from holding Monitor Ventures or generate 13.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Intrepid Metals Corp  vs.  Monitor Ventures

Intrepid Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intrepid Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Intrepid Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Monitor Ventures

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monitor Ventures are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Monitor Ventures may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intrepid Metals and Monitor Ventures

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

The idea behind Intrepid Metals Corp and Monitor Ventures 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.