Correlation Between Carawine Resources and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both Carawine Resources 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 Carawine Resources and Iluka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carawine Resources Limited and Iluka Resources, you can compare the effects of market volatilities on Carawine Resources 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 Carawine Resources with a short position of Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carawine Resources and Iluka Resources.
Diversification Opportunities for Carawine Resources and Iluka Resources
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carawine and Iluka is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Carawine Resources Limited and Iluka Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources and Carawine 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 Carawine Resources Limited 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 Carawine Resources i.e., Carawine Resources and Iluka Resources go up and down completely randomly.
Pair Corralation between Carawine Resources and Iluka Resources
Assuming the 90 days trading horizon Carawine Resources Limited is expected to generate 1.28 times more return on investment than Iluka Resources. However, Carawine Resources is 1.28 times more volatile than Iluka Resources. It trades about 0.01 of its potential returns per unit of risk. Iluka Resources is currently generating about -0.08 per unit of risk. If you would invest 11.00 in Carawine Resources Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Carawine Resources Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carawine Resources Limited vs. Iluka Resources
Performance |
| Timeline |
| Carawine Resources |
| Iluka Resources |
Carawine Resources and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carawine Resources and Iluka Resources
The main advantage of trading using opposite Carawine Resources and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carawine Resources 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.| Carawine Resources vs. Northern Star Resources | Carawine Resources vs. Evolution Mining | Carawine Resources vs. Bluescope Steel | Carawine Resources vs. Sandfire Resources NL |
| Iluka Resources vs. Black Rock Mining | Iluka Resources vs. Retail Food Group | Iluka Resources vs. Andean Silver Limited | Iluka Resources vs. Super Retail Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |