Correlation Between Flinders Resources and O3 Mining
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and O3 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 Flinders Resources and O3 Mining 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 O3 Mining, you can compare the effects of market volatilities on Flinders Resources and O3 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 Flinders Resources with a short position of O3 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and O3 Mining.
Diversification Opportunities for Flinders Resources and O3 Mining
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flinders and OIII is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and O3 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O3 Mining 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 O3 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O3 Mining has no effect on the direction of Flinders Resources i.e., Flinders Resources and O3 Mining go up and down completely randomly.
Pair Corralation between Flinders Resources and O3 Mining
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 14.76 times more return on investment than O3 Mining. However, Flinders Resources is 14.76 times more volatile than O3 Mining. It trades about 0.15 of its potential returns per unit of risk. O3 Mining is currently generating about 0.17 per unit of risk. If you would invest 507.00 in Flinders Resources Limited on November 2, 2024 and sell it today you would earn a total of 67.00 from holding Flinders Resources Limited or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Flinders Resources Limited vs. O3 Mining
Performance |
| Timeline |
| Flinders Resources |
| O3 Mining |
Flinders Resources and O3 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and O3 Mining
The main advantage of trading using opposite Flinders Resources and O3 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, O3 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 O3 Mining will offset losses from the drop in O3 Mining's long position.| Flinders Resources vs. Labrador Iron Ore | Flinders Resources vs. InPlay Oil Corp | Flinders Resources vs. UnitedHealth Group CDR | Flinders Resources vs. Major Drilling 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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