Correlation Between Azarga Metals and SSR Mining

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

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

Diversification Opportunities for Azarga Metals and SSR Mining

-0.02

Correlation Coefficient

Azarga Metals  SSR Mining

Good diversification

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

Pair Corralation between Azarga Metals and SSR Mining

Assuming the 90 days horizon Azarga Metals Corp is expected to generate 4.01 times more return on investment than SSR Mining. However, Azarga Metals is 4.01 times more volatile than SSR Mining. It trades about 0.04 of its potential returns per unit of risk. SSR Mining is currently generating about 0.13 per unit of risk. If you would invest  3.00  in Azarga Metals Corp on March 14, 2024 and sell it today you would lose (0.50) from holding Azarga Metals Corp or give up 16.67% of portfolio value over 90 days.

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

Azarga Metals Corp  vs.  SSR Mining

Azarga Metals Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Azarga Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Azarga Metals showed solid returns over the last few months and may actually be approaching a breakup point.

SSR Mining

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSR Mining are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, SSR Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azarga Metals and SSR Mining

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

The idea behind Azarga Metals Corp and SSR 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 CEOs Directory module to screen CEOs from public companies around the world.