Correlation Between Base Resources and Cobalt Blue
Can any of the company-specific risk be diversified away by investing in both Base Resources and Cobalt Blue 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 Base Resources and Cobalt Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Base Resources Limited and Cobalt Blue Holdings, you can compare the effects of market volatilities on Base Resources and Cobalt Blue 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 Base Resources with a short position of Cobalt Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Base Resources and Cobalt Blue.
Diversification Opportunities for Base Resources and Cobalt Blue
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Base and Cobalt is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Base Resources Limited and Cobalt Blue Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobalt Blue Holdings and Base 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 Base Resources Limited are associated (or correlated) with Cobalt Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobalt Blue Holdings has no effect on the direction of Base Resources i.e., Base Resources and Cobalt Blue go up and down completely randomly.
Pair Corralation between Base Resources and Cobalt Blue
Assuming the 90 days horizon Base Resources Limited is expected to generate 0.63 times more return on investment than Cobalt Blue. However, Base Resources Limited is 1.59 times less risky than Cobalt Blue. It trades about 0.29 of its potential returns per unit of risk. Cobalt Blue Holdings is currently generating about -0.01 per unit of risk. If you would invest 13.00 in Base Resources Limited on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Base Resources Limited or generate 53.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 39.68% |
Values | Daily Returns |
Base Resources Limited vs. Cobalt Blue Holdings
Performance |
Timeline |
Base Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Cobalt Blue Holdings |
Base Resources and Cobalt Blue Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Base Resources and Cobalt Blue
The main advantage of trading using opposite Base Resources and Cobalt Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Base Resources position performs unexpectedly, Cobalt Blue 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 Cobalt Blue will offset losses from the drop in Cobalt Blue's long position.Base Resources vs. Macmahon Holdings Limited | Base Resources vs. Rokmaster Resources Corp | Base Resources vs. Hudson Resources | Base Resources vs. Thunder Gold Corp |
Cobalt Blue vs. Aurelia Metals Limited | Cobalt Blue vs. Centaurus Metals Limited | Cobalt Blue vs. Artemis Resources | Cobalt Blue vs. Ascendant Resources |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |