Correlation Between Contango ORE and Catalyst Metals

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

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

Diversification Opportunities for Contango ORE and Catalyst Metals

-0.04

Correlation Coefficient

Contango ORE  Catalyst Metals

Good diversification

The 3 months correlation between Contango and Catalyst is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and Catalyst Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Metals and Contango ORE 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 Contango ORE are associated (or correlated) with Catalyst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Metals has no effect on the direction of Contango ORE i.e., Contango ORE and Catalyst Metals go up and down completely randomly.

Pair Corralation between Contango ORE and Catalyst Metals

Given the investment horizon of 90 days Contango ORE is expected to generate 0.8 times more return on investment than Catalyst Metals. However, Contango ORE is 1.24 times less risky than Catalyst Metals. It trades about 0.17 of its potential returns per unit of risk. Catalyst Metals Limited is currently generating about -0.04 per unit of risk. If you would invest  1,348  in Contango ORE on April 20, 2025 and sell it today you would earn a total of  629.00  from holding Contango ORE or generate 46.66% return on investment over 90 days.

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

Contango ORE  vs.  Catalyst Metals Limited

Contango ORE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Contango ORE displayed solid returns over the last few months and may actually be approaching a breakup point.

Catalyst Metals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Contango ORE and Catalyst Metals

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

The idea behind Contango ORE and Catalyst Metals Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.