Correlation Between Princeton Capital and Contango ORE

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

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

Diversification Opportunities for Princeton Capital and Contango ORE

0.07

Correlation Coefficient

Princeton Capital  Contango ORE

Significant diversification

The 3 months correlation between Princeton and Contango is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Princeton Capital and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE and Princeton Capital 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 Princeton Capital are associated (or correlated) with Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Princeton Capital i.e., Princeton Capital and Contango ORE go up and down completely randomly.

Pair Corralation between Princeton Capital and Contango ORE

Given the investment horizon of 90 days Princeton Capital is expected to generate 1.43 times less return on investment than Contango ORE. In addition to that, Princeton Capital is 1.67 times more volatile than Contango ORE. It trades about 0.01 of its total potential returns per unit of risk. Contango ORE is currently generating about 0.02 per unit of volatility. If you would invest  1,010  in Contango ORE on December 30, 2024 and sell it today you would lose (2.00) from holding Contango ORE or give up 0.2% of portfolio value over 90 days.

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

Princeton Capital  vs.  Contango ORE

Princeton Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Princeton Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Princeton Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Contango ORE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Contango ORE is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Princeton Capital and Contango ORE

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

The idea behind Princeton Capital and Contango ORE 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.