Correlation Between Metalla Royalty and Diamcor Mining

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

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

Diversification Opportunities for Metalla Royalty and Diamcor Mining

0.28

Correlation Coefficient

Metalla Royalty  Diamcor Mining

Modest diversification

The 3 months correlation between Metalla and Diamcor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Metalla Royalty Streaming and Diamcor Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamcor Mining and Metalla Royalty 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 Metalla Royalty Streaming are associated (or correlated) with Diamcor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamcor Mining has no effect on the direction of Metalla Royalty i.e., Metalla Royalty and Diamcor Mining go up and down completely randomly.

Pair Corralation between Metalla Royalty and Diamcor Mining

Considering the 90-day investment horizon Metalla Royalty Streaming is expected to generate 0.88 times more return on investment than Diamcor Mining. However, Metalla Royalty Streaming is 1.13 times less risky than Diamcor Mining. It trades about 0.02 of its potential returns per unit of risk. Diamcor Mining is currently generating about -0.13 per unit of risk. If you would invest  299.00  in Metalla Royalty Streaming on August 30, 2024 and sell it today you would earn a total of  2.00  from holding Metalla Royalty Streaming or generate 0.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Metalla Royalty Streaming  vs.  Diamcor Mining

Metalla Royalty Streaming

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Metalla Royalty Streaming are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Metalla Royalty is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Diamcor Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Diamcor Mining 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Metalla Royalty and Diamcor Mining

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

The idea behind Metalla Royalty Streaming and Diamcor Mining 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 CEOs Directory module to screen CEOs from public companies around the world.