Correlation Between Core Assets and Pacific Empire

Can any of the company-specific risk be diversified away by investing in both Core Assets and Pacific Empire 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 Core Assets and Pacific Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Core Assets Corp and Pacific Empire Minerals, you can compare the effects of market volatilities on Core Assets and Pacific Empire 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 Core Assets with a short position of Pacific Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Assets and Pacific Empire.

Diversification Opportunities for Core Assets and Pacific Empire

0.46

Correlation Coefficient

Core Assets  Pacific Empire

Very weak diversification

The 3 months correlation between Core and Pacific is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Core Assets Corp and Pacific Empire Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Empire Minerals and Core Assets 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 Core Assets Corp are associated (or correlated) with Pacific Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Empire Minerals has no effect on the direction of Core Assets i.e., Core Assets and Pacific Empire go up and down completely randomly.

Pair Corralation between Core Assets and Pacific Empire

Assuming the 90 days horizon Core Assets Corp is expected to generate 0.49 times more return on investment than Pacific Empire. However, Core Assets Corp is 2.02 times less risky than Pacific Empire. It trades about -0.23 of its potential returns per unit of risk. Pacific Empire Minerals is currently generating about -0.18 per unit of risk. If you would invest  60.00  in Core Assets Corp on August 31, 2025 and sell it today you would lose (13.00) from holding Core Assets Corp or give up 21.67% of portfolio value over 90 days.

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

Core Assets Corp  vs.  Pacific Empire Minerals

Core Assets Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Core Assets Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Core Assets may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pacific Empire Minerals

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Empire Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pacific Empire reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Core Assets and Pacific Empire

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

The idea behind Core Assets Corp and Pacific Empire Minerals 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.