Correlation Between Clime Investment and Raiden Resources
Can any of the company-specific risk be diversified away by investing in both Clime Investment and Raiden 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 Clime Investment and Raiden Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clime Investment Management and Raiden Resources, you can compare the effects of market volatilities on Clime Investment and Raiden 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 Clime Investment with a short position of Raiden Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and Raiden Resources.
Diversification Opportunities for Clime Investment and Raiden Resources
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clime and Raiden is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management and Raiden Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiden Resources and Clime Investment 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 Clime Investment Management are associated (or correlated) with Raiden Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiden Resources has no effect on the direction of Clime Investment i.e., Clime Investment and Raiden Resources go up and down completely randomly.
Pair Corralation between Clime Investment and Raiden Resources
Assuming the 90 days trading horizon Clime Investment Management is expected to generate 0.15 times more return on investment than Raiden Resources. However, Clime Investment Management is 6.61 times less risky than Raiden Resources. It trades about -0.07 of its potential returns per unit of risk. Raiden Resources is currently generating about -0.31 per unit of risk. If you would invest 35.00 in Clime Investment Management on September 13, 2024 and sell it today you would lose (1.00) from holding Clime Investment Management or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clime Investment Management vs. Raiden Resources
Performance |
| Timeline |
| Clime Investment Man |
| Raiden Resources |
Clime Investment and Raiden Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clime Investment and Raiden Resources
The main advantage of trading using opposite Clime Investment and Raiden Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment position performs unexpectedly, Raiden 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 Raiden Resources will offset losses from the drop in Raiden Resources' long position.| Clime Investment vs. Capitol Health | Clime Investment vs. Fisher Paykel Healthcare | Clime Investment vs. Retail Food Group | Clime Investment vs. K2 Asset Management |
| Raiden Resources vs. Northern Star Resources | Raiden Resources vs. Evolution Mining | Raiden Resources vs. Bluescope Steel | Raiden Resources vs. Sandfire Resources NL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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