Correlation Between ValOre Metals and Linamar

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

Diversification Opportunities for ValOre Metals and Linamar

0.15

Correlation Coefficient

ValOre Metals  Linamar

Average diversification

The 3 months correlation between ValOre and Linamar is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ValOre Metals Corp and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar 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 Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of ValOre Metals i.e., ValOre Metals and Linamar go up and down completely randomly.

Pair Corralation between ValOre Metals and Linamar

Given the investment horizon of 90 days ValOre Metals Corp is expected to generate 4.13 times more return on investment than Linamar. However, ValOre Metals is 4.13 times more volatile than Linamar. It trades about 0.01 of its potential returns per unit of risk. Linamar is currently generating about -0.1 per unit of risk. If you would invest  8.00  in ValOre Metals Corp on December 30, 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ValOre Metals Corp  vs.  Linamar

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.

Linamar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Linamar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with ValOre Metals and Linamar

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

The idea behind ValOre Metals Corp and Linamar 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.