Correlation Between Benchmark Metals and Frontera Energy

Can any of the company-specific risk be diversified away by investing in both Benchmark Metals and Frontera Energy 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 Benchmark Metals and Frontera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Benchmark Metals and Frontera Energy

0.36

Correlation Coefficient

Benchmark Metals  Frontera Energy

Weak diversification

The 3 months correlation between Benchmark and Frontera is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Metals and Frontera Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Energy Corp and Benchmark 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 Benchmark Metals are associated (or correlated) with Frontera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Energy Corp has no effect on the direction of Benchmark Metals i.e., Benchmark Metals and Frontera Energy go up and down completely randomly.

Pair Corralation between Benchmark Metals and Frontera Energy

Assuming the 90 days horizon Benchmark Metals is expected to generate 4.01 times less return on investment than Frontera Energy. But when comparing it to its historical volatility, Benchmark Metals is 1.13 times less risky than Frontera Energy. It trades about 0.02 of its potential returns per unit of risk. Frontera Energy Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  599.00  in Frontera Energy Corp on August 22, 2025 and sell it today you would earn a total of  50.00  from holding Frontera Energy Corp or generate 8.35% return on investment over 90 days.

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

Benchmark Metals  vs.  Frontera Energy Corp

Benchmark Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Benchmark Metals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Frontera Energy Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Frontera Energy Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Frontera Energy may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Benchmark Metals and Frontera Energy

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

The idea behind Benchmark Metals and Frontera Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.