Correlation Between Sanatana Resources and Marimaca Copper

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

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

Diversification Opportunities for Sanatana Resources and Marimaca Copper

-0.55

Correlation Coefficient

Sanatana Resources  Marimaca Copper

Excellent diversification

The 3 months correlation between Sanatana and Marimaca is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sanatana Resources and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp and Sanatana 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 Sanatana Resources are associated (or correlated) with Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Sanatana Resources i.e., Sanatana Resources and Marimaca Copper go up and down completely randomly.

Pair Corralation between Sanatana Resources and Marimaca Copper

Assuming the 90 days horizon Sanatana Resources is expected to generate 30.93 times more return on investment than Marimaca Copper. However, Sanatana Resources is 30.93 times more volatile than Marimaca Copper Corp. It trades about 0.1 of its potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.01 per unit of risk. If you would invest  14.00  in Sanatana Resources on December 30, 2024 and sell it today you would lose (4.50) from holding Sanatana Resources or give up 32.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sanatana Resources  vs.  Marimaca Copper Corp

Sanatana Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sanatana Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sanatana Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Marimaca Copper Corp

Risk-Adjusted Performance

Weak

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

Pair Trading with Sanatana Resources and Marimaca Copper

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

The idea behind Sanatana Resources and Marimaca Copper 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.