Correlation Between Voltage Metals and Vendetta Mining

Can any of the company-specific risk be diversified away by investing in both Voltage Metals and Vendetta Mining 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 Vendetta Mining 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 Vendetta Mining Corp, you can compare the effects of market volatilities on Voltage Metals and Vendetta Mining 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 Vendetta Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltage Metals and Vendetta Mining.

Diversification Opportunities for Voltage Metals and Vendetta Mining

-0.18

Correlation Coefficient

Voltage Metals  Vendetta Mining

Good diversification

The 3 months correlation between Voltage and Vendetta is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Voltage Metals Corp and Vendetta Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vendetta Mining Corp 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 Vendetta Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vendetta Mining Corp has no effect on the direction of Voltage Metals i.e., Voltage Metals and Vendetta Mining go up and down completely randomly.

Pair Corralation between Voltage Metals and Vendetta Mining

Assuming the 90 days horizon Voltage Metals Corp is expected to under-perform the Vendetta Mining. In addition to that, Voltage Metals is 1.62 times more volatile than Vendetta Mining Corp. It trades about -0.21 of its total potential returns per unit of risk. Vendetta Mining Corp is currently generating about 0.23 per unit of volatility. If you would invest  0.85  in Vendetta Mining Corp on October 25, 2024 and sell it today you would earn a total of  0.40  from holding Vendetta Mining Corp or generate 47.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Voltage Metals Corp  vs.  Vendetta Mining Corp

Voltage Metals Corp

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vendetta Mining Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vendetta Mining Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vendetta Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voltage Metals and Vendetta Mining

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

The idea behind Voltage Metals Corp and Vendetta Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.