Correlation Between Canaf Investments and Ramaco Resources
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Ramaco Resources 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 Canaf Investments and Ramaco Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Ramaco Resources, you can compare the effects of market volatilities on Canaf Investments and Ramaco Resources 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 Canaf Investments with a short position of Ramaco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Ramaco Resources.
Diversification Opportunities for Canaf Investments and Ramaco Resources
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canaf and Ramaco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Ramaco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramaco Resources and Canaf Investments 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 Canaf Investments are associated (or correlated) with Ramaco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramaco Resources has no effect on the direction of Canaf Investments i.e., Canaf Investments and Ramaco Resources go up and down completely randomly.
Pair Corralation between Canaf Investments and Ramaco Resources
Assuming the 90 days horizon Canaf Investments is expected to under-perform the Ramaco Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Canaf Investments is 2.09 times less risky than Ramaco Resources. The pink sheet trades about -0.3 of its potential returns per unit of risk. The Ramaco Resources is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Ramaco Resources on September 2, 2024 and sell it today you would earn a total of 265.00 from holding Ramaco Resources or generate 26.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Ramaco Resources
Performance |
| Timeline |
| Canaf Investments |
| Ramaco Resources |
Canaf Investments and Ramaco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Ramaco Resources
The main advantage of trading using opposite Canaf Investments and Ramaco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Ramaco Resources 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 Ramaco Resources will offset losses from the drop in Ramaco Resources' long position.| Canaf Investments vs. Ramaco Resources | Canaf Investments vs. Warrior Met Coal | Canaf Investments vs. Arch Resources | Canaf Investments vs. Alpha Metallurgical Resources |
| Ramaco Resources vs. Warrior Met Coal | Ramaco Resources vs. Arch Resources | Ramaco Resources vs. Alpha Metallurgical Resources | Ramaco Resources vs. American Resources 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |