Correlation Between Materion and EMX Royalty

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

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

Diversification Opportunities for Materion and EMX Royalty

-0.23

Correlation Coefficient

Materion  EMX Royalty

Very good diversification

The 3 months correlation between Materion and EMX is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Materion and EMX Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMX Royalty Corp and Materion 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 Materion are associated (or correlated) with EMX Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMX Royalty Corp has no effect on the direction of Materion i.e., Materion and EMX Royalty go up and down completely randomly.

Pair Corralation between Materion and EMX Royalty

Given the investment horizon of 90 days Materion is expected to generate 1.24 times more return on investment than EMX Royalty. However, Materion is 1.24 times more volatile than EMX Royalty Corp. It trades about 0.06 of its potential returns per unit of risk. EMX Royalty Corp is currently generating about 0.07 per unit of risk. If you would invest  10,619  in Materion on September 3, 2024 and sell it today you would earn a total of  943.00  from holding Materion or generate 8.88% return on investment over 90 days.

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

Materion  vs.  EMX Royalty Corp

Materion

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Materion are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Materion may actually be approaching a critical reversion point that can send shares even higher in January 2025.

EMX Royalty Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EMX Royalty Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, EMX Royalty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Materion and EMX Royalty

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

The idea behind Materion and EMX Royalty 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.