Correlation Between Cleveland Cliffs and Contango ORE

Can any of the company-specific risk be diversified away by investing in both Cleveland Cliffs and Contango ORE 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 Cleveland Cliffs and Contango ORE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cleveland Cliffs and Contango ORE, you can compare the effects of market volatilities on Cleveland Cliffs and Contango ORE 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 Cleveland Cliffs with a short position of Contango ORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleveland Cliffs and Contango ORE.

Diversification Opportunities for Cleveland Cliffs and Contango ORE

-0.57

Correlation Coefficient

Cleveland Cliffs  Contango ORE

Excellent diversification

The 3 months correlation between Cleveland and Contango is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland Cliffs and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE and Cleveland Cliffs 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 Cleveland Cliffs are associated (or correlated) with Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Cleveland Cliffs i.e., Cleveland Cliffs and Contango ORE go up and down completely randomly.

Pair Corralation between Cleveland Cliffs and Contango ORE

Considering the 90-day investment horizon Cleveland Cliffs is expected to generate 5.38 times less return on investment than Contango ORE. In addition to that, Cleveland Cliffs is 1.8 times more volatile than Contango ORE. It trades about 0.03 of its total potential returns per unit of risk. Contango ORE is currently generating about 0.3 per unit of volatility. If you would invest  1,716  in Contango ORE on March 22, 2025 and sell it today you would earn a total of  414.00  from holding Contango ORE or generate 24.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Cleveland Cliffs  vs.  Contango ORE

Cleveland Cliffs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cleveland Cliffs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Contango ORE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Contango ORE displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cleveland Cliffs and Contango ORE

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

The idea behind Cleveland Cliffs and Contango ORE 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.