Correlation Between Core Natural and Vast Renewables
Can any of the company-specific risk be diversified away by investing in both Core Natural and Vast Renewables 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 Core Natural and Vast Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Natural Resources, and Vast Renewables Limited, you can compare the effects of market volatilities on Core Natural and Vast Renewables 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 Core Natural with a short position of Vast Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Natural and Vast Renewables.
Diversification Opportunities for Core Natural and Vast Renewables
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Core and Vast is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Core Natural Resources, and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables and Core Natural 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 Core Natural Resources, are associated (or correlated) with Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of Core Natural i.e., Core Natural and Vast Renewables go up and down completely randomly.
Pair Corralation between Core Natural and Vast Renewables
Considering the 90-day investment horizon Core Natural Resources, is expected to generate 1.21 times more return on investment than Vast Renewables. However, Core Natural is 1.21 times more volatile than Vast Renewables Limited. It trades about -0.3 of its potential returns per unit of risk. Vast Renewables Limited is currently generating about -0.64 per unit of risk. If you would invest 10,490 in Core Natural Resources, on November 5, 2024 and sell it today you would lose (1,456) from holding Core Natural Resources, or give up 13.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Core Natural Resources, vs. Vast Renewables Limited
Performance |
| Timeline |
| Core Natural Resources, |
| Vast Renewables |
Core Natural and Vast Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Natural and Vast Renewables
The main advantage of trading using opposite Core Natural and Vast Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Natural position performs unexpectedly, Vast Renewables 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 Vast Renewables will offset losses from the drop in Vast Renewables' long position.| Core Natural vs. BRC Inc | Core Natural vs. RH | Core Natural vs. Turning Point Brands | Core Natural vs. CDW Corp |
| Vast Renewables vs. BCE Inc | Vast Renewables vs. Cheche Group Class | Vast Renewables vs. Freedom Internet Group | Vast Renewables vs. Visteon 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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