Correlation Between Benton Resources and Bald Eagle
Can any of the company-specific risk be diversified away by investing in both Benton Resources and Bald Eagle 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 Bald Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benton Resources and Bald Eagle Gold, you can compare the effects of market volatilities on Benton Resources and Bald Eagle 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 Bald Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benton Resources and Bald Eagle.
Diversification Opportunities for Benton Resources and Bald Eagle
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Benton and Bald is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Benton Resources and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle Gold 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 Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of Benton Resources i.e., Benton Resources and Bald Eagle go up and down completely randomly.
Pair Corralation between Benton Resources and Bald Eagle
Assuming the 90 days horizon Benton Resources is expected to under-perform the Bald Eagle. In addition to that, Benton Resources is 3.86 times more volatile than Bald Eagle Gold. It trades about 0.0 of its total potential returns per unit of risk. Bald Eagle Gold is currently generating about 0.08 per unit of volatility. If you would invest 36.00 in Bald Eagle Gold on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Bald Eagle Gold or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benton Resources vs. Bald Eagle Gold
Performance |
| Timeline |
| Benton Resources |
| Bald Eagle Gold |
Benton Resources and Bald Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benton Resources and Bald Eagle
The main advantage of trading using opposite Benton Resources and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benton Resources position performs unexpectedly, Bald Eagle 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 Bald Eagle will offset losses from the drop in Bald Eagle's long position.| Benton Resources vs. Silver Hammer Mining | Benton Resources vs. Reyna Silver Corp | Benton Resources vs. Guanajuato Silver | Benton Resources vs. Silver One Resources |
| Bald Eagle vs. Merck Company | Bald Eagle vs. Pharvaris BV | Bald Eagle vs. Brinker International | Bald Eagle vs. Alcoa Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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