Correlation Between Semirara Mining and Crown Asia

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

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

Diversification Opportunities for Semirara Mining and Crown Asia

0.33

Correlation Coefficient

Semirara Mining  Crown Asia

Weak diversification

The 3 months correlation between Semirara and Crown is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Semirara Mining Corp and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals and Semirara 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 Semirara Mining Corp are associated (or correlated) with Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Semirara Mining i.e., Semirara Mining and Crown Asia go up and down completely randomly.

Pair Corralation between Semirara Mining and Crown Asia

Assuming the 90 days trading horizon Semirara Mining Corp is expected to under-perform the Crown Asia. But the stock apears to be less risky and, when comparing its historical volatility, Semirara Mining Corp is 1.72 times less risky than Crown Asia. The stock trades about -0.03 of its potential returns per unit of risk. The Crown Asia Chemicals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Crown Asia Chemicals on April 23, 2025 and sell it today you would earn a total of  10.00  from holding Crown Asia Chemicals or generate 6.06% return on investment over 90 days.

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

Semirara Mining Corp  vs.  Crown Asia Chemicals

Semirara Mining Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semirara Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Semirara Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Crown Asia Chemicals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Crown Asia Chemicals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Crown Asia may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Semirara Mining and Crown Asia

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

The idea behind Semirara Mining Corp and Crown Asia Chemicals 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.