Correlation Between Norra Metals and Mason Graphite

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

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

Diversification Opportunities for Norra Metals and Mason Graphite

0.0

Correlation Coefficient

Norra Metals  Mason Graphite

Pay attention - limited upside

The 3 months correlation between Norra and Mason is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Norra Metals Corp and Mason Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mason Graphite and Norra Metals 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 Norra Metals Corp are associated (or correlated) with Mason Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mason Graphite has no effect on the direction of Norra Metals i.e., Norra Metals and Mason Graphite go up and down completely randomly.

Pair Corralation between Norra Metals and Mason Graphite

If you would invest  5.35  in Mason Graphite on October 25, 2024 and sell it today you would lose (0.55) from holding Mason Graphite or give up 10.28% of portfolio value over 90 days.

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

Norra Metals Corp  vs.  Mason Graphite

Norra Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norra Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Norra Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mason Graphite

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Mason Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Mason Graphite is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Norra Metals and Mason Graphite

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

The idea behind Norra Metals Corp and Mason Graphite 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.