Correlation Between New Pacific and Integra Resources

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

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

Diversification Opportunities for New Pacific and Integra Resources

0.83

Correlation Coefficient

New Pacific  Integra Resources

Very poor diversification

The 3 months correlation between New and Integra is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals 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 New Pacific 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 New Pacific Metals 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 New Pacific i.e., New Pacific and Integra Resources go up and down completely randomly.

Pair Corralation between New Pacific and Integra Resources

Given the investment horizon of 90 days New Pacific Metals is expected to under-perform the Integra Resources. In addition to that, New Pacific is 1.19 times more volatile than Integra Resources Corp. It trades about -0.02 of its total potential returns per unit of risk. Integra Resources Corp is currently generating about 0.01 per unit of volatility. If you would invest  97.00  in Integra Resources Corp on October 3, 2024 and sell it today you would lose (10.00) from holding Integra Resources Corp or give up 10.31% of portfolio value over 90 days.

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

New Pacific Metals  vs.  Integra Resources Corp

New Pacific Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Pacific Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Integra Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integra Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with New Pacific and Integra Resources

The main advantage of trading using opposite New Pacific and Integra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific 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 New Pacific Metals 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.