Correlation Between Searchlight Minerals and Strategy Shares

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

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

Diversification Opportunities for Searchlight Minerals and Strategy Shares

-0.22

Correlation Coefficient

Searchlight Minerals  Strategy Shares

Very good diversification

The 3 months correlation between Searchlight and Strategy is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Searchlight Minerals Corp and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares and Searchlight Minerals 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 Searchlight Minerals Corp are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of Searchlight Minerals i.e., Searchlight Minerals and Strategy Shares go up and down completely randomly.

Pair Corralation between Searchlight Minerals and Strategy Shares

If you would invest  0.43  in Searchlight Minerals Corp on October 27, 2024 and sell it today you would lose (0.03) from holding Searchlight Minerals Corp or give up 6.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Searchlight Minerals Corp  vs.  Strategy Shares

Searchlight Minerals Corp

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Searchlight Minerals Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Searchlight Minerals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Strategy Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategy Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Searchlight Minerals and Strategy Shares

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

The idea behind Searchlight Minerals Corp and Strategy Shares 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.