Correlation Between Integra Resources and Scottie Resources

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

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

Diversification Opportunities for Integra Resources and Scottie Resources

0.38

Correlation Coefficient

Integra Resources  Scottie Resources

Weak diversification

The 3 months correlation between Integra and Scottie is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Integra Resources Corp and Scottie Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottie Resources Corp and Integra 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 Integra Resources Corp are associated (or correlated) with Scottie Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottie Resources Corp has no effect on the direction of Integra Resources i.e., Integra Resources and Scottie Resources go up and down completely randomly.

Pair Corralation between Integra Resources and Scottie Resources

Given the investment horizon of 90 days Integra Resources Corp is expected to generate 0.64 times more return on investment than Scottie Resources. However, Integra Resources Corp is 1.57 times less risky than Scottie Resources. It trades about 0.12 of its potential returns per unit of risk. Scottie Resources Corp is currently generating about 0.0 per unit of risk. If you would invest  93.00  in Integra Resources Corp on November 29, 2024 and sell it today you would earn a total of  20.00  from holding Integra Resources Corp or generate 21.51% return on investment over 90 days.

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

Integra Resources Corp  vs.  Scottie Resources Corp

Integra Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Resources Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Integra Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Scottie Resources Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Integra Resources and Scottie Resources

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

The idea behind Integra Resources Corp and Scottie Resources Corp 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.