Correlation Between CORNISH METALS and GOLDQUEST MINING

Can any of the company-specific risk be diversified away by investing in both CORNISH METALS and GOLDQUEST MINING 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 CORNISH METALS and GOLDQUEST MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CORNISH METALS INC and GOLDQUEST MINING, you can compare the effects of market volatilities on CORNISH METALS and GOLDQUEST MINING 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 CORNISH METALS with a short position of GOLDQUEST MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORNISH METALS and GOLDQUEST MINING.

Diversification Opportunities for CORNISH METALS and GOLDQUEST MINING

0.29

Correlation Coefficient

CORNISH METALS  GOLDQUEST MINING

Modest diversification

The 3 months correlation between CORNISH and GOLDQUEST is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CORNISH METALS INC and GOLDQUEST MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDQUEST MINING and CORNISH 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 CORNISH METALS INC are associated (or correlated) with GOLDQUEST MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDQUEST MINING has no effect on the direction of CORNISH METALS i.e., CORNISH METALS and GOLDQUEST MINING go up and down completely randomly.

Pair Corralation between CORNISH METALS and GOLDQUEST MINING

Assuming the 90 days trading horizon CORNISH METALS is expected to generate 828.75 times less return on investment than GOLDQUEST MINING. But when comparing it to its historical volatility, CORNISH METALS INC is 1.17 times less risky than GOLDQUEST MINING. It trades about 0.0 of its potential returns per unit of risk. GOLDQUEST MINING is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  33.00  in GOLDQUEST MINING on May 5, 2025 and sell it today you would earn a total of  5.00  from holding GOLDQUEST MINING or generate 15.15% return on investment over 90 days.

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

CORNISH METALS INC  vs.  GOLDQUEST MINING

CORNISH METALS INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CORNISH METALS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CORNISH METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GOLDQUEST MINING

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDQUEST MINING are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GOLDQUEST MINING unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CORNISH METALS and GOLDQUEST MINING

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

The idea behind CORNISH METALS INC and GOLDQUEST MINING 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.