Correlation Between Focus Graphite and Ridgestone Mining
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Ridgestone 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 Focus Graphite and Ridgestone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Ridgestone Mining, you can compare the effects of market volatilities on Focus Graphite and Ridgestone 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 Focus Graphite with a short position of Ridgestone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Ridgestone Mining.
Diversification Opportunities for Focus Graphite and Ridgestone Mining
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and Ridgestone is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Ridgestone Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgestone Mining and Focus 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 Focus Graphite are associated (or correlated) with Ridgestone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgestone Mining has no effect on the direction of Focus Graphite i.e., Focus Graphite and Ridgestone Mining go up and down completely randomly.
Pair Corralation between Focus Graphite and Ridgestone Mining
Assuming the 90 days horizon Focus Graphite is expected to generate 70.83 times more return on investment than Ridgestone Mining. However, Focus Graphite is 70.83 times more volatile than Ridgestone Mining. It trades about 0.05 of its potential returns per unit of risk. Ridgestone Mining is currently generating about 0.21 per unit of risk. If you would invest 6.00 in Focus Graphite on January 13, 2025 and sell it today you would earn a total of 0.00 from holding Focus Graphite or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Graphite vs. Ridgestone Mining
Performance |
| Timeline |
| Focus Graphite |
| Ridgestone Mining |
Focus Graphite and Ridgestone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Ridgestone Mining
The main advantage of trading using opposite Focus Graphite and Ridgestone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Ridgestone 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 Ridgestone Mining will offset losses from the drop in Ridgestone Mining's long position.| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Syrah Resources Limited | Focus Graphite vs. Altura Mining Limited | Focus Graphite vs. Vulcan Minerals |
| Ridgestone Mining vs. Sherritt International | Ridgestone Mining vs. Metals X Limited | Ridgestone Mining vs. Anglo American PLC | Ridgestone Mining vs. ZincX Resources 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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