Correlation Between Erdene Resource and Vendetta Mining
Can any of the company-specific risk be diversified away by investing in both Erdene Resource and Vendetta Mining 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 Erdene Resource and Vendetta Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erdene Resource Development and Vendetta Mining Corp, you can compare the effects of market volatilities on Erdene Resource and Vendetta Mining 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 Erdene Resource with a short position of Vendetta Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erdene Resource and Vendetta Mining.
Diversification Opportunities for Erdene Resource and Vendetta Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erdene and Vendetta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Erdene Resource Development and Vendetta Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vendetta Mining Corp and Erdene Resource 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 Erdene Resource Development are associated (or correlated) with Vendetta Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vendetta Mining Corp has no effect on the direction of Erdene Resource i.e., Erdene Resource and Vendetta Mining go up and down completely randomly.
Pair Corralation between Erdene Resource and Vendetta Mining
Assuming the 90 days horizon Erdene Resource Development is expected to generate 0.48 times more return on investment than Vendetta Mining. However, Erdene Resource Development is 2.07 times less risky than Vendetta Mining. It trades about 0.21 of its potential returns per unit of risk. Vendetta Mining Corp is currently generating about 0.05 per unit of risk. If you would invest 40.00 in Erdene Resource Development on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Erdene Resource Development or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erdene Resource Development vs. Vendetta Mining Corp
Performance |
| Timeline |
| Erdene Resource Deve |
| Vendetta Mining Corp |
Erdene Resource and Vendetta Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erdene Resource and Vendetta Mining
The main advantage of trading using opposite Erdene Resource and Vendetta Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erdene Resource position performs unexpectedly, Vendetta Mining 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 Vendetta Mining will offset losses from the drop in Vendetta Mining's long position.| Erdene Resource vs. Aurelia Metals Limited | Erdene Resource vs. Artemis Resources | Erdene Resource vs. Azimut Exploration | Erdene Resource vs. Champion Bear Resources |
| Vendetta Mining vs. Granite Creek Copper | Vendetta Mining vs. Ascendant Resources | Vendetta Mining vs. Altiplano Metals | Vendetta Mining vs. Erdene Resource Development |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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