Correlation Between Camino Minerals and Parex Resources
Can any of the company-specific risk be diversified away by investing in both Camino Minerals and Parex Resources 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 Camino Minerals and Parex Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camino Minerals and Parex Resources, you can compare the effects of market volatilities on Camino Minerals and Parex Resources 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 Camino Minerals with a short position of Parex Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camino Minerals and Parex Resources.
Diversification Opportunities for Camino Minerals and Parex Resources
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Camino and Parex is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Camino Minerals and Parex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parex Resources and Camino Minerals 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 Camino Minerals are associated (or correlated) with Parex Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parex Resources has no effect on the direction of Camino Minerals i.e., Camino Minerals and Parex Resources go up and down completely randomly.
Pair Corralation between Camino Minerals and Parex Resources
Assuming the 90 days horizon Camino Minerals is expected to under-perform the Parex Resources. In addition to that, Camino Minerals is 5.03 times more volatile than Parex Resources. It trades about -0.02 of its total potential returns per unit of risk. Parex Resources is currently generating about 0.09 per unit of volatility. If you would invest 2,211 in Parex Resources on January 24, 2024 and sell it today you would earn a total of 209.00 from holding Parex Resources or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camino Minerals vs. Parex Resources
Performance |
| Timeline |
| Camino Minerals |
| Parex Resources |
Camino Minerals and Parex Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camino Minerals and Parex Resources
The main advantage of trading using opposite Camino Minerals and Parex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camino Minerals position performs unexpectedly, Parex Resources 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 Parex Resources will offset losses from the drop in Parex Resources' long position.| Camino Minerals vs. Bravada Gold | Camino Minerals vs. Midnight Sun Mining | Camino Minerals vs. Thunderstruck Resources | Camino Minerals vs. Eros Resources Corp |
| Parex Resources vs. Tourmaline Oil Corp | Parex Resources vs. Enerplus | Parex Resources vs. PrairieSky Royalty | Parex Resources vs. ARC Resources |
Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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