Correlation Between Benton Resources and Altiplano Metals
Can any of the company-specific risk be diversified away by investing in both Benton Resources and Altiplano 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 Benton Resources and Altiplano Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benton Resources and Altiplano Metals, you can compare the effects of market volatilities on Benton Resources and Altiplano 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 Benton Resources with a short position of Altiplano Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benton Resources and Altiplano Metals.
Diversification Opportunities for Benton Resources and Altiplano Metals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Benton and Altiplano is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Benton Resources and Altiplano Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altiplano Metals and Benton 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 Benton Resources are associated (or correlated) with Altiplano Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altiplano Metals has no effect on the direction of Benton Resources i.e., Benton Resources and Altiplano Metals go up and down completely randomly.
Pair Corralation between Benton Resources and Altiplano Metals
Assuming the 90 days horizon Benton Resources is expected to generate 2.86 times more return on investment than Altiplano Metals. However, Benton Resources is 2.86 times more volatile than Altiplano Metals. It trades about 0.09 of its potential returns per unit of risk. Altiplano Metals is currently generating about 0.01 per unit of risk. If you would invest 11.00 in Benton Resources on August 26, 2024 and sell it today you would lose (4.50) from holding Benton Resources or give up 40.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benton Resources vs. Altiplano Metals
Performance |
| Timeline |
| Benton Resources |
| Altiplano Metals |
Benton Resources and Altiplano Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benton Resources and Altiplano Metals
The main advantage of trading using opposite Benton Resources and Altiplano Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benton Resources position performs unexpectedly, Altiplano 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 Altiplano Metals will offset losses from the drop in Altiplano Metals' long position.| Benton Resources vs. Ascendant Resources | Benton Resources vs. Cantex Mine Development | Benton Resources vs. Amarc Resources | Benton Resources vs. Sterling Metals Corp |
| Altiplano Metals vs. Norra Metals Corp | Altiplano Metals vs. ZincX Resources Corp | Altiplano Metals vs. Nuinsco Resources Limited | Altiplano Metals vs. South Star Battery |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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