Correlation Between Aristocrat Leisure and Raiden Resources
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Raiden Resources 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 Aristocrat Leisure and Raiden Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure and Raiden Resources, you can compare the effects of market volatilities on Aristocrat Leisure and Raiden Resources 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 Aristocrat Leisure with a short position of Raiden Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Raiden Resources.
Diversification Opportunities for Aristocrat Leisure and Raiden Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristocrat and Raiden is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure and Raiden Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiden Resources and Aristocrat Leisure 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 Aristocrat Leisure are associated (or correlated) with Raiden Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiden Resources has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Raiden Resources go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Raiden Resources
Assuming the 90 days trading horizon Aristocrat Leisure is expected to generate 0.22 times more return on investment than Raiden Resources. However, Aristocrat Leisure is 4.46 times less risky than Raiden Resources. It trades about 0.16 of its potential returns per unit of risk. Raiden Resources is currently generating about -0.03 per unit of risk. If you would invest 3,869 in Aristocrat Leisure on September 3, 2024 and sell it today you would earn a total of 2,950 from holding Aristocrat Leisure or generate 76.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure vs. Raiden Resources
Performance |
| Timeline |
| Aristocrat Leisure |
| Raiden Resources |
Aristocrat Leisure and Raiden Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Raiden Resources
The main advantage of trading using opposite Aristocrat Leisure and Raiden Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Raiden Resources 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 Raiden Resources will offset losses from the drop in Raiden Resources' long position.| Aristocrat Leisure vs. Westpac Banking | Aristocrat Leisure vs. Champion Iron | Aristocrat Leisure vs. iShares Global Healthcare | Aristocrat Leisure vs. Peel Mining |
| Raiden Resources vs. Northern Star Resources | Raiden Resources vs. Evolution Mining | Raiden Resources vs. Bluescope Steel | Raiden Resources vs. Aneka Tambang Tbk |
Check out your portfolio center.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.
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