Correlation Between ValOre Metals and PHN Multi

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

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

Diversification Opportunities for ValOre Metals and PHN Multi

-0.23

Correlation Coefficient

ValOre Metals  PHN Multi

Very good diversification

The 3 months correlation between ValOre and PHN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ValOre Metals Corp and PHN Multi Style All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHN Multi Style and ValOre 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 ValOre Metals Corp are associated (or correlated) with PHN Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHN Multi Style has no effect on the direction of ValOre Metals i.e., ValOre Metals and PHN Multi go up and down completely randomly.

Pair Corralation between ValOre Metals and PHN Multi

Given the investment horizon of 90 days ValOre Metals Corp is expected to generate 8.17 times more return on investment than PHN Multi. However, ValOre Metals is 8.17 times more volatile than PHN Multi Style All Cap. It trades about 0.01 of its potential returns per unit of risk. PHN Multi Style All Cap is currently generating about -0.07 per unit of risk. If you would invest  8.00  in ValOre Metals Corp on December 31, 2024 and sell it today you would lose (1.00) from holding ValOre Metals Corp or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

ValOre Metals Corp  vs.  PHN Multi Style All Cap

ValOre Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ValOre Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ValOre Metals is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PHN Multi Style

Risk-Adjusted Performance

Very Weak

Over the last 90 days PHN Multi Style All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, PHN Multi is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ValOre Metals and PHN Multi

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

The idea behind ValOre Metals Corp and PHN Multi Style All Cap 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.