Correlation Between Voltage Metals and Pampa Metals

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

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

Diversification Opportunities for Voltage Metals and Pampa Metals

0.0

Correlation Coefficient

Voltage Metals  Pampa Metals

Pay attention - limited upside

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

Pair Corralation between Voltage Metals and Pampa Metals

Assuming the 90 days horizon Voltage Metals Corp is expected to under-perform the Pampa Metals. In addition to that, Voltage Metals is 1.13 times more volatile than Pampa Metals. It trades about -0.18 of its total potential returns per unit of risk. Pampa Metals is currently generating about 0.04 per unit of volatility. If you would invest  11.00  in Pampa Metals on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Pampa Metals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Voltage Metals Corp  vs.  Pampa Metals

Voltage Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voltage Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pampa Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pampa Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Pampa Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voltage Metals and Pampa Metals

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

The idea behind Voltage Metals Corp and Pampa Metals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.