Correlation Between Impact Shares and Searchlight Minerals

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

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

Diversification Opportunities for Impact Shares and Searchlight Minerals

-0.31

Correlation Coefficient

Impact Shares  Searchlight Minerals

Very good diversification

The 3 months correlation between Impact and Searchlight is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Impact Shares NAACP and Searchlight Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Searchlight Minerals Corp and Impact Shares 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 Impact Shares NAACP are associated (or correlated) with Searchlight Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Searchlight Minerals Corp has no effect on the direction of Impact Shares i.e., Impact Shares and Searchlight Minerals go up and down completely randomly.

Pair Corralation between Impact Shares and Searchlight Minerals

Given the investment horizon of 90 days Impact Shares NAACP is expected to under-perform the Searchlight Minerals. But the etf apears to be less risky and, when comparing its historical volatility, Impact Shares NAACP is 10.0 times less risky than Searchlight Minerals. The etf trades about -0.24 of its potential returns per unit of risk. The Searchlight Minerals Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.23  in Searchlight Minerals Corp on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Searchlight Minerals Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Impact Shares NAACP  vs.  Searchlight Minerals Corp

Impact Shares NAACP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Shares NAACP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Impact Shares is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Searchlight Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Searchlight Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Searchlight Minerals is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Impact Shares and Searchlight Minerals

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

The idea behind Impact Shares NAACP and Searchlight Minerals 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.