Correlation Between Pacific Ridge and Cordoba Minerals

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Can any of the company-specific risk be diversified away by investing in both Pacific Ridge and Cordoba Minerals 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 Pacific Ridge and Cordoba Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Ridge Exploration and Cordoba Minerals Corp, you can compare the effects of market volatilities on Pacific Ridge and Cordoba Minerals 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 Pacific Ridge with a short position of Cordoba Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Ridge and Cordoba Minerals.

Diversification Opportunities for Pacific Ridge and Cordoba Minerals

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Pacific and Cordoba is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Ridge Exploration and Cordoba Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cordoba Minerals Corp and Pacific Ridge 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 Pacific Ridge Exploration are associated (or correlated) with Cordoba Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cordoba Minerals Corp has no effect on the direction of Pacific Ridge i.e., Pacific Ridge and Cordoba Minerals go up and down completely randomly.

Pair Corralation between Pacific Ridge and Cordoba Minerals

Assuming the 90 days horizon Pacific Ridge Exploration is expected to generate 1.09 times more return on investment than Cordoba Minerals. However, Pacific Ridge is 1.09 times more volatile than Cordoba Minerals Corp. It trades about 0.22 of its potential returns per unit of risk. Cordoba Minerals Corp is currently generating about 0.08 per unit of risk. If you would invest  8.00  in Pacific Ridge Exploration on May 6, 2025 and sell it today you would earn a total of  12.00  from holding Pacific Ridge Exploration or generate 150.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Pacific Ridge Exploration  vs.  Cordoba Minerals Corp

 Performance 
       Timeline  
Pacific Ridge Exploration 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Ridge Exploration are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pacific Ridge reported solid returns over the last few months and may actually be approaching a breakup point.
Cordoba Minerals Corp 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cordoba Minerals Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Cordoba Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pacific Ridge and Cordoba Minerals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pacific Ridge and Cordoba Minerals

The main advantage of trading using opposite Pacific Ridge and Cordoba Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Ridge position performs unexpectedly, Cordoba Minerals 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 Cordoba Minerals will offset losses from the drop in Cordoba Minerals' long position.
The idea behind Pacific Ridge Exploration and Cordoba Minerals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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