Correlation Between Calumet Specialty and IMPACT Silver

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

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

Diversification Opportunities for Calumet Specialty and IMPACT Silver

-0.35

Correlation Coefficient

Calumet Specialty  IMPACT Silver

Very good diversification

The 3 months correlation between Calumet and IMPACT is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and IMPACT Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPACT Silver Corp and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with IMPACT Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPACT Silver Corp has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and IMPACT Silver go up and down completely randomly.

Pair Corralation between Calumet Specialty and IMPACT Silver

Given the investment horizon of 90 days Calumet Specialty Products is expected to under-perform the IMPACT Silver. But the stock apears to be less risky and, when comparing its historical volatility, Calumet Specialty Products is 2.08 times less risky than IMPACT Silver. The stock trades about -0.01 of its potential returns per unit of risk. The IMPACT Silver Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  23.00  in IMPACT Silver Corp on January 20, 2024 and sell it today you would earn a total of  0.00  from holding IMPACT Silver Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Calumet Specialty Products  vs.  IMPACT Silver Corp

Calumet Specialty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calumet Specialty Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Calumet Specialty is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

IMPACT Silver Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IMPACT Silver Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, IMPACT Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calumet Specialty and IMPACT Silver

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

The idea behind Calumet Specialty Products and IMPACT Silver 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.