Correlation Between Angkor Resources and Rio2
Can any of the company-specific risk be diversified away by investing in both Angkor Resources and Rio2 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 Angkor Resources and Rio2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angkor Resources Corp and Rio2 Limited, you can compare the effects of market volatilities on Angkor Resources and Rio2 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 Angkor Resources with a short position of Rio2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angkor Resources and Rio2.
Diversification Opportunities for Angkor Resources and Rio2
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Angkor and Rio2 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Angkor Resources Corp and Rio2 Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rio2 Limited and Angkor Resources 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 Angkor Resources Corp are associated (or correlated) with Rio2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rio2 Limited has no effect on the direction of Angkor Resources i.e., Angkor Resources and Rio2 go up and down completely randomly.
Pair Corralation between Angkor Resources and Rio2
Assuming the 90 days horizon Angkor Resources is expected to generate 3.81 times less return on investment than Rio2. In addition to that, Angkor Resources is 2.01 times more volatile than Rio2 Limited. It trades about 0.01 of its total potential returns per unit of risk. Rio2 Limited is currently generating about 0.06 per unit of volatility. If you would invest 36.00 in Rio2 Limited on November 3, 2024 and sell it today you would earn a total of 13.00 from holding Rio2 Limited or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.93% |
| Values | Daily Returns |
Angkor Resources Corp vs. Rio2 Limited
Performance |
| Timeline |
| Angkor Resources Corp |
| Rio2 Limited |
Angkor Resources and Rio2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angkor Resources and Rio2
The main advantage of trading using opposite Angkor Resources and Rio2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angkor Resources position performs unexpectedly, Rio2 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 Rio2 will offset losses from the drop in Rio2's long position.| Angkor Resources vs. Argo Gold | Angkor Resources vs. Blue Star Gold | Angkor Resources vs. Advance Gold Corp | Angkor Resources vs. Advance United Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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