Correlation Between Ceylon Graphite and Hudson Resources
Can any of the company-specific risk be diversified away by investing in both Ceylon Graphite and Hudson 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 Ceylon Graphite and Hudson Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceylon Graphite Corp and Hudson Resources, you can compare the effects of market volatilities on Ceylon Graphite and Hudson 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 Ceylon Graphite with a short position of Hudson Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Graphite and Hudson Resources.
Diversification Opportunities for Ceylon Graphite and Hudson Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ceylon and Hudson is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Graphite Corp and Hudson Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Resources and Ceylon Graphite 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 Ceylon Graphite Corp are associated (or correlated) with Hudson Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Resources has no effect on the direction of Ceylon Graphite i.e., Ceylon Graphite and Hudson Resources go up and down completely randomly.
Pair Corralation between Ceylon Graphite and Hudson Resources
Assuming the 90 days horizon Ceylon Graphite is expected to generate 17.9 times less return on investment than Hudson Resources. But when comparing it to its historical volatility, Ceylon Graphite Corp is 2.33 times less risky than Hudson Resources. It trades about 0.03 of its potential returns per unit of risk. Hudson Resources is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Hudson Resources on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Hudson Resources or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Graphite Corp vs. Hudson Resources
Performance |
| Timeline |
| Ceylon Graphite Corp |
| Hudson Resources |
Ceylon Graphite and Hudson Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Graphite and Hudson Resources
The main advantage of trading using opposite Ceylon Graphite and Hudson Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Graphite position performs unexpectedly, Hudson 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 Hudson Resources will offset losses from the drop in Hudson Resources' long position.| Ceylon Graphite vs. Argent Minerals Limited | Ceylon Graphite vs. Edison Cobalt Corp | Ceylon Graphite vs. Champion Bear Resources | Ceylon Graphite vs. Ascendant Resources |
| Hudson Resources vs. Macmahon Holdings Limited | Hudson Resources vs. Rokmaster Resources Corp | Hudson Resources vs. Thunder Gold Corp | Hudson Resources vs. Prime Meridian 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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