Correlation Between Metalla Royalty and Integra Resources

Can any of the company-specific risk be diversified away by investing in both Metalla Royalty and Integra 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 Metalla Royalty and Integra Resources 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 Integra Resources Corp, you can compare the effects of market volatilities on Metalla Royalty and Integra 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 Metalla Royalty with a short position of Integra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalla Royalty and Integra Resources.

Diversification Opportunities for Metalla Royalty and Integra Resources

0.74

Correlation Coefficient

Metalla Royalty  Integra Resources

Poor diversification

The 3 months correlation between Metalla and Integra is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Metalla Royalty Streaming and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources Corp 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 Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of Metalla Royalty i.e., Metalla Royalty and Integra Resources go up and down completely randomly.

Pair Corralation between Metalla Royalty and Integra Resources

Considering the 90-day investment horizon Metalla Royalty Streaming is expected to under-perform the Integra Resources. But the stock apears to be less risky and, when comparing its historical volatility, Metalla Royalty Streaming is 1.05 times less risky than Integra Resources. The stock trades about -0.01 of its potential returns per unit of risk. The Integra Resources Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Integra Resources Corp on November 28, 2024 and sell it today you would earn a total of  17.00  from holding Integra Resources Corp or generate 18.28% return on investment over 90 days.

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

Metalla Royalty Streaming  vs.  Integra Resources Corp

Metalla Royalty Streaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metalla Royalty Streaming has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Integra Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Resources Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Integra Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metalla Royalty and Integra Resources

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

The idea behind Metalla Royalty Streaming and Integra Resources 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.