Correlation Between VVC Exploration and CANEX Metals

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

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

Diversification Opportunities for VVC Exploration and CANEX Metals

-0.71

Correlation Coefficient

VVC Exploration  CANEX Metals

Pay attention - limited upside

The 3 months correlation between VVC and CANEX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding VVC Exploration Corp and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals and VVC Exploration 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 VVC Exploration Corp are associated (or correlated) with CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of VVC Exploration i.e., VVC Exploration and CANEX Metals go up and down completely randomly.

Pair Corralation between VVC Exploration and CANEX Metals

Assuming the 90 days horizon VVC Exploration is expected to generate 5.66 times less return on investment than CANEX Metals. In addition to that, VVC Exploration is 1.34 times more volatile than CANEX Metals. It trades about 0.02 of its total potential returns per unit of risk. CANEX Metals is currently generating about 0.14 per unit of volatility. If you would invest  5.00  in CANEX Metals on April 21, 2025 and sell it today you would earn a total of  4.50  from holding CANEX Metals or generate 90.0% return on investment over 90 days.

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

VVC Exploration Corp  vs.  CANEX Metals

VVC Exploration Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VVC Exploration Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VVC Exploration showed solid returns over the last few months and may actually be approaching a breakup point.

CANEX Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CANEX Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CANEX Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VVC Exploration and CANEX Metals

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

The idea behind VVC Exploration Corp and CANEX Metals 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.