Correlation Between Ascendant Resources and Group Ten
Can any of the company-specific risk be diversified away by investing in both Ascendant Resources and Group Ten 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 Ascendant Resources and Group Ten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendant Resources and Group Ten Metals, you can compare the effects of market volatilities on Ascendant Resources and Group Ten 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 Ascendant Resources with a short position of Group Ten. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendant Resources and Group Ten.
Diversification Opportunities for Ascendant Resources and Group Ten
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ascendant and Group is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ascendant Resources and Group Ten Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Ten Metals and Ascendant 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 Ascendant Resources are associated (or correlated) with Group Ten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Ten Metals has no effect on the direction of Ascendant Resources i.e., Ascendant Resources and Group Ten go up and down completely randomly.
Pair Corralation between Ascendant Resources and Group Ten
Assuming the 90 days horizon Ascendant Resources is expected to generate 1.14 times less return on investment than Group Ten. But when comparing it to its historical volatility, Ascendant Resources is 1.11 times less risky than Group Ten. It trades about 0.09 of its potential returns per unit of risk. Group Ten Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Group Ten Metals on January 16, 2025 and sell it today you would earn a total of 3.00 from holding Group Ten Metals or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendant Resources vs. Group Ten Metals
Performance |
| Timeline |
| Ascendant Resources |
| Group Ten Metals |
Ascendant Resources and Group Ten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendant Resources and Group Ten
The main advantage of trading using opposite Ascendant Resources and Group Ten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendant Resources position performs unexpectedly, Group Ten 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 Group Ten will offset losses from the drop in Group Ten's long position.| Ascendant Resources vs. Edison Cobalt Corp | Ascendant Resources vs. Champion Bear Resources | Ascendant Resources vs. Avarone Metals | Ascendant Resources vs. Adriatic Metals PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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