Correlation Between Globex Mining and Commander Resources

Can any of the company-specific risk be diversified away by investing in both Globex Mining and Commander Resources 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 Globex Mining and Commander Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globex Mining Enterprises and Commander Resources, you can compare the effects of market volatilities on Globex Mining and Commander Resources 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 Globex Mining with a short position of Commander Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Commander Resources.

Diversification Opportunities for Globex Mining and Commander Resources

0.35

Correlation Coefficient

Globex Mining  Commander Resources

Weak diversification

The 3 months correlation between Globex and Commander is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander Resources and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of Globex Mining i.e., Globex Mining and Commander Resources go up and down completely randomly.

Pair Corralation between Globex Mining and Commander Resources

Assuming the 90 days horizon Globex Mining Enterprises is expected to under-perform the Commander Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Globex Mining Enterprises is 1.85 times less risky than Commander Resources. The otc stock trades about -0.05 of its potential returns per unit of risk. The Commander Resources is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4.97  in Commander Resources on February 3, 2025 and sell it today you would lose (0.97) from holding Commander Resources or give up 19.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Globex Mining Enterprises  vs.  Commander Resources

Globex Mining Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globex Mining Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Commander Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Commander Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Globex Mining and Commander Resources

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

The idea behind Globex Mining Enterprises and Commander Resources 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..