Correlation Between Infinico Metals and Globex Mining

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

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

Diversification Opportunities for Infinico Metals and Globex Mining

-0.55

Correlation Coefficient

Infinico Metals  Globex Mining

Excellent diversification

The 3 months correlation between Infinico and Globex is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and Infinico 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 Infinico Metals Corp are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Infinico Metals i.e., Infinico Metals and Globex Mining go up and down completely randomly.

Pair Corralation between Infinico Metals and Globex Mining

Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the Globex Mining. In addition to that, Infinico Metals is 2.62 times more volatile than Globex Mining Enterprises. It trades about -0.08 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.2 per unit of volatility. If you would invest  83.00  in Globex Mining Enterprises on August 31, 2024 and sell it today you would earn a total of  28.00  from holding Globex Mining Enterprises or generate 33.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

Infinico Metals Corp  vs.  Globex Mining Enterprises

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Globex Mining Enterprises

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Globex Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and Globex Mining

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

The idea behind Infinico Metals Corp and Globex Mining Enterprises 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.