Correlation Between Sendero Resources and Skeena Resources

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

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

Diversification Opportunities for Sendero Resources and Skeena Resources

-0.57

Correlation Coefficient

Sendero Resources  Skeena Resources

Excellent diversification

The 3 months correlation between Sendero and Skeena is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sendero Resources Corp and Skeena Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skeena Resources and Sendero Resources 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 Sendero Resources Corp are associated (or correlated) with Skeena Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skeena Resources has no effect on the direction of Sendero Resources i.e., Sendero Resources and Skeena Resources go up and down completely randomly.

Pair Corralation between Sendero Resources and Skeena Resources

Assuming the 90 days trading horizon Sendero Resources Corp is expected to generate 5.78 times more return on investment than Skeena Resources. However, Sendero Resources is 5.78 times more volatile than Skeena Resources. It trades about 0.02 of its potential returns per unit of risk. Skeena Resources is currently generating about 0.05 per unit of risk. If you would invest  40.00  in Sendero Resources Corp on September 20, 2024 and sell it today you would lose (19.00) from holding Sendero Resources Corp or give up 47.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Sendero Resources Corp  vs.  Skeena Resources

Sendero Resources Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sendero Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sendero Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Skeena Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skeena Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Skeena Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sendero Resources and Skeena Resources

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

The idea behind Sendero Resources Corp and Skeena Resources 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 Commodity Directory module to find actively traded commodities issued by global exchanges.