Correlation Between Jervois Mining and Starr Peak

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

By analyzing existing cross correlation between Jervois Mining and Starr Peak Exploration, you can compare the effects of market volatilities on Jervois Mining and Starr Peak 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 Jervois Mining with a short position of Starr Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jervois Mining and Starr Peak.

Diversification Opportunities for Jervois Mining and Starr Peak

0.11

Correlation Coefficient

Jervois Mining  Starr Peak

Average diversification

The 3 months correlation between Jervois and Starr is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jervois Mining and Starr Peak Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starr Peak Exploration and Jervois Mining 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 Jervois Mining are associated (or correlated) with Starr Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starr Peak Exploration has no effect on the direction of Jervois Mining i.e., Jervois Mining and Starr Peak go up and down completely randomly.

Pair Corralation between Jervois Mining and Starr Peak

Assuming the 90 days horizon Jervois Mining is expected to generate 2.19 times less return on investment than Starr Peak. But when comparing it to its historical volatility, Jervois Mining is 2.55 times less risky than Starr Peak. It trades about 0.08 of its potential returns per unit of risk. Starr Peak Exploration is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Starr Peak Exploration on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Starr Peak Exploration or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Jervois Mining  vs.  Starr Peak Exploration

Jervois Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jervois Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Jervois Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Starr Peak Exploration

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Starr Peak Exploration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Starr Peak reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jervois Mining and Starr Peak

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

The idea behind Jervois Mining and Starr Peak Exploration 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.