Correlation Between Mineral Res and Commander Resources

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

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

Diversification Opportunities for Mineral Res and Commander Resources

-0.63

Correlation Coefficient

Mineral Res  Commander Resources

Excellent diversification

The 3 months correlation between Mineral and Commander is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Res and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander Resources 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 Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of Mineral Res i.e., Mineral Res and Commander Resources go up and down completely randomly.

Pair Corralation between Mineral Res and Commander Resources

Assuming the 90 days horizon Mineral Res is expected to under-perform the Commander Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mineral Res is 1.33 times less risky than Commander Resources. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Commander Resources is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4.97  in Commander Resources on December 30, 2024 and sell it today you would lose (0.97) from holding Commander Resources or give up 19.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Mineral Res  vs.  Commander Resources

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.

Commander Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Commander Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Mineral Res and Commander Resources

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

The idea behind Mineral Res and Commander Resources 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.