Correlation Between Mineral Res and Gratomic

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

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

Diversification Opportunities for Mineral Res and Gratomic

0.67

Correlation Coefficient

Mineral Res  Gratomic

Poor diversification

The 3 months correlation between Mineral and Gratomic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Res and Gratomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gratomic and Mineral Res 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 Mineral Res are associated (or correlated) with Gratomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gratomic has no effect on the direction of Mineral Res i.e., Mineral Res and Gratomic go up and down completely randomly.

Pair Corralation between Mineral Res and Gratomic

Assuming the 90 days horizon Mineral Res is expected to generate 0.6 times more return on investment than Gratomic. However, Mineral Res is 1.65 times less risky than Gratomic. It trades about -0.09 of its potential returns per unit of risk. Gratomic is currently generating about -0.06 per unit of risk. If you would invest  2,107  in Mineral Res on December 27, 2024 and sell it today you would lose (567.00) from holding Mineral Res or give up 26.91% of portfolio value over 90 days.

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

Mineral Res  vs.  Gratomic

Mineral Res

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mineral Res has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Gratomic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gratomic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Mineral Res and Gratomic

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

The idea behind Mineral Res and Gratomic 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.