Correlation Between Benton Resources and Vulcan Minerals
Can any of the company-specific risk be diversified away by investing in both Benton Resources and Vulcan Minerals 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 Vulcan Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benton Resources and Vulcan Minerals, you can compare the effects of market volatilities on Benton Resources and Vulcan Minerals 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 Vulcan Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benton Resources and Vulcan Minerals.
Diversification Opportunities for Benton Resources and Vulcan Minerals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Benton and Vulcan is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Benton Resources and Vulcan Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Minerals 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 Vulcan Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Minerals has no effect on the direction of Benton Resources i.e., Benton Resources and Vulcan Minerals go up and down completely randomly.
Pair Corralation between Benton Resources and Vulcan Minerals
Assuming the 90 days horizon Benton Resources is expected to generate 1.76 times less return on investment than Vulcan Minerals. In addition to that, Benton Resources is 1.18 times more volatile than Vulcan Minerals. It trades about 0.03 of its total potential returns per unit of risk. Vulcan Minerals is currently generating about 0.05 per unit of volatility. If you would invest 10.00 in Vulcan Minerals on September 3, 2024 and sell it today you would lose (1.50) from holding Vulcan Minerals or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Benton Resources vs. Vulcan Minerals
Performance |
| Timeline |
| Benton Resources |
| Vulcan Minerals |
Benton Resources and Vulcan Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benton Resources and Vulcan Minerals
The main advantage of trading using opposite Benton Resources and Vulcan Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benton Resources position performs unexpectedly, Vulcan Minerals 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 Vulcan Minerals will offset losses from the drop in Vulcan Minerals' long position.| Benton Resources vs. Aurelia Metals Limited | Benton Resources vs. Artemis Resources | Benton Resources vs. Ascendant Resources | Benton Resources vs. Altiplano Metals |
| Vulcan Minerals vs. Mason Graphite | Vulcan Minerals vs. Rockridge Resources | Vulcan Minerals vs. Volt Lithium Corp | Vulcan Minerals vs. Northern Graphite |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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