Correlation Between Flinders Resources and Brunswick Exploration
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and Brunswick Exploration 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 Flinders Resources and Brunswick Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flinders Resources Limited and Brunswick Exploration, you can compare the effects of market volatilities on Flinders Resources and Brunswick Exploration 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 Flinders Resources with a short position of Brunswick Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Brunswick Exploration.
Diversification Opportunities for Flinders Resources and Brunswick Exploration
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flinders and Brunswick is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Brunswick Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Exploration and Flinders 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 Flinders Resources Limited are associated (or correlated) with Brunswick Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Exploration has no effect on the direction of Flinders Resources i.e., Flinders Resources and Brunswick Exploration go up and down completely randomly.
Pair Corralation between Flinders Resources and Brunswick Exploration
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 0.85 times more return on investment than Brunswick Exploration. However, Flinders Resources Limited is 1.17 times less risky than Brunswick Exploration. It trades about 0.13 of its potential returns per unit of risk. Brunswick Exploration is currently generating about -0.08 per unit of risk. If you would invest 507.00 in Flinders Resources Limited on November 3, 2024 and sell it today you would earn a total of 63.00 from holding Flinders Resources Limited or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flinders Resources Limited vs. Brunswick Exploration
Performance |
| Timeline |
| Flinders Resources |
| Brunswick Exploration |
Flinders Resources and Brunswick Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and Brunswick Exploration
The main advantage of trading using opposite Flinders Resources and Brunswick Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, Brunswick Exploration 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 Brunswick Exploration will offset losses from the drop in Brunswick Exploration's long position.| Flinders Resources vs. IAMGold | Flinders Resources vs. Eldorado Gold Corp | Flinders Resources vs. Alamos Gold | Flinders Resources vs. NovaGold Resources |
| Brunswick Exploration vs. InZinc Mining | Brunswick Exploration vs. Hercules Metals Corp | Brunswick Exploration vs. Guanajuato Silver | Brunswick Exploration vs. Copaur Minerals |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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