Correlation Between Hannan Metals and Metalquest Mining

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

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

Diversification Opportunities for Hannan Metals and Metalquest Mining

-0.4

Correlation Coefficient

Hannan Metals  Metalquest Mining

Very good diversification

The 3 months correlation between Hannan and Metalquest is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hannan Metals and Metalquest Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalquest Mining and Hannan 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 Hannan Metals are associated (or correlated) with Metalquest Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalquest Mining has no effect on the direction of Hannan Metals i.e., Hannan Metals and Metalquest Mining go up and down completely randomly.

Pair Corralation between Hannan Metals and Metalquest Mining

Assuming the 90 days horizon Hannan Metals is expected to generate 4.53 times less return on investment than Metalquest Mining. In addition to that, Hannan Metals is 1.11 times more volatile than Metalquest Mining. It trades about 0.01 of its total potential returns per unit of risk. Metalquest Mining is currently generating about 0.07 per unit of volatility. If you would invest  6.00  in Metalquest Mining on March 23, 2025 and sell it today you would earn a total of  1.00  from holding Metalquest Mining or generate 16.67% return on investment over 90 days.

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

Hannan Metals  vs.  Metalquest Mining

Hannan Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hannan Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hannan Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Metalquest Mining

Risk-Adjusted Performance

Modest

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

Pair Trading with Hannan Metals and Metalquest Mining

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

The idea behind Hannan Metals and Metalquest 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.