Correlation Between Millennium Silver and InPlay Oil

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

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

Diversification Opportunities for Millennium Silver and InPlay Oil

0.01

Correlation Coefficient

Millennium Silver  InPlay Oil

Significant diversification

The 3 months correlation between Millennium and InPlay is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Silver Corp and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and Millennium Silver 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 Millennium Silver Corp are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Millennium Silver i.e., Millennium Silver and InPlay Oil go up and down completely randomly.

Pair Corralation between Millennium Silver and InPlay Oil

Assuming the 90 days horizon Millennium Silver Corp is not expected to generate positive returns. Moreover, Millennium Silver is 2.69 times more volatile than InPlay Oil Corp. It trades away all of its potential returns to assume current level of volatility. InPlay Oil Corp is currently generating about -0.03 per unit of risk. If you would invest  1.00  in Millennium Silver Corp on October 8, 2024 and sell it today you would lose (0.50) from holding Millennium Silver Corp or give up 50.0% of portfolio value over 90 days.

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

Millennium Silver Corp  vs.  InPlay Oil Corp

Millennium Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millennium Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

InPlay Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InPlay Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Millennium Silver and InPlay Oil

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

The idea behind Millennium Silver Corp and InPlay Oil 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.