Correlation Between CAT Strategic and Labrador Gold

Can any of the company-specific risk be diversified away by investing in both CAT Strategic and Labrador Gold 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 CAT Strategic and Labrador Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CAT Strategic Metals and Labrador Gold Corp, you can compare the effects of market volatilities on CAT Strategic and Labrador Gold 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 CAT Strategic with a short position of Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAT Strategic and Labrador Gold.

Diversification Opportunities for CAT Strategic and Labrador Gold

0.45

Correlation Coefficient

CAT Strategic  Labrador Gold

Very weak diversification

The 3 months correlation between CAT and Labrador is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CAT Strategic Metals and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold Corp and CAT Strategic 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 CAT Strategic Metals are associated (or correlated) with Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of CAT Strategic i.e., CAT Strategic and Labrador Gold go up and down completely randomly.

Pair Corralation between CAT Strategic and Labrador Gold

Assuming the 90 days horizon CAT Strategic Metals is expected to generate 8.59 times more return on investment than Labrador Gold. However, CAT Strategic is 8.59 times more volatile than Labrador Gold Corp. It trades about 0.11 of its potential returns per unit of risk. Labrador Gold Corp is currently generating about 0.1 per unit of risk. If you would invest  0.29  in CAT Strategic Metals on June 30, 2025 and sell it today you would lose (0.09) from holding CAT Strategic Metals or give up 31.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.97%
Values	Daily Returns

CAT Strategic Metals  vs.  Labrador Gold Corp

CAT Strategic Metals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CAT Strategic Metals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CAT Strategic reported solid returns over the last few months and may actually be approaching a breakup point.

Labrador Gold Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Labrador Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Labrador Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAT Strategic and Labrador Gold

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

The idea behind CAT Strategic Metals and Labrador Gold 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.