Correlation Between China Rare and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both China Rare and Iluka 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 China Rare and Iluka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Rare Earth and Iluka Resources Limited, you can compare the effects of market volatilities on China Rare and Iluka 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 China Rare with a short position of Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Rare and Iluka Resources.
Diversification Opportunities for China Rare and Iluka Resources
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Iluka is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Rare Earth and Iluka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources and China Rare 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 China Rare Earth are associated (or correlated) with Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of China Rare i.e., China Rare and Iluka Resources go up and down completely randomly.
Pair Corralation between China Rare and Iluka Resources
If you would invest 6.00 in China Rare Earth on September 2, 2024 and sell it today you would earn a total of 0.00 from holding China Rare Earth or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
China Rare Earth vs. Iluka Resources Limited
Performance |
| Timeline |
| China Rare Earth |
| Iluka Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Rare and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Rare and Iluka Resources
The main advantage of trading using opposite China Rare and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Rare position performs unexpectedly, Iluka 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| China Rare vs. ATT Inc | China Rare vs. Merck Company | China Rare vs. Walt Disney | China Rare vs. Caterpillar |
| Iluka Resources vs. Iluka Resources Ltd | Iluka Resources vs. China Rare Earth | Iluka Resources vs. Greenland Minerals And | Iluka Resources vs. Mkango 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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