Correlation Between Marimaca Copper and GMV Minerals

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

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

Diversification Opportunities for Marimaca Copper and GMV Minerals

-0.04

Correlation Coefficient

Marimaca Copper  GMV Minerals

Good diversification

The 3 months correlation between Marimaca and GMV is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp and GMV Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMV Minerals and Marimaca Copper 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 Marimaca Copper Corp are associated (or correlated) with GMV Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMV Minerals has no effect on the direction of Marimaca Copper i.e., Marimaca Copper and GMV Minerals go up and down completely randomly.

Pair Corralation between Marimaca Copper and GMV Minerals

Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 0.44 times more return on investment than GMV Minerals. However, Marimaca Copper Corp is 2.28 times less risky than GMV Minerals. It trades about -0.1 of its potential returns per unit of risk. GMV Minerals is currently generating about -0.2 per unit of risk. If you would invest  469.00  in Marimaca Copper Corp on September 15, 2024 and sell it today you would lose (28.00) from holding Marimaca Copper Corp or give up 5.97% of portfolio value over 90 days.

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

Marimaca Copper Corp  vs.  GMV Minerals

Marimaca Copper Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Marimaca Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

GMV Minerals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GMV Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, GMV Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marimaca Copper and GMV Minerals

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

The idea behind Marimaca Copper Corp and GMV Minerals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.