Correlation Between Finexia Financial and Renascor Resources
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Renascor 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 Finexia Financial and Renascor Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finexia Financial Group and Renascor Resources, you can compare the effects of market volatilities on Finexia Financial and Renascor 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 Finexia Financial with a short position of Renascor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Renascor Resources.
Diversification Opportunities for Finexia Financial and Renascor Resources
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Finexia and Renascor is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Renascor Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renascor Resources and Finexia Financial 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 Finexia Financial Group are associated (or correlated) with Renascor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renascor Resources has no effect on the direction of Finexia Financial i.e., Finexia Financial and Renascor Resources go up and down completely randomly.
Pair Corralation between Finexia Financial and Renascor Resources
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 1.39 times more return on investment than Renascor Resources. However, Finexia Financial is 1.39 times more volatile than Renascor Resources. It trades about 0.27 of its potential returns per unit of risk. Renascor Resources is currently generating about -0.2 per unit of risk. If you would invest 26.00 in Finexia Financial Group on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Finexia Financial Group or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finexia Financial Group vs. Renascor Resources
Performance |
| Timeline |
| Finexia Financial |
| Renascor Resources |
Finexia Financial and Renascor Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Renascor Resources
The main advantage of trading using opposite Finexia Financial and Renascor Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Renascor 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 Renascor Resources will offset losses from the drop in Renascor Resources' long position.| Finexia Financial vs. Renascor Resources | Finexia Financial vs. Venus Metals | Finexia Financial vs. Havilah Resources | Finexia Financial vs. Asara Resources |
| Renascor Resources vs. Northern Star Resources | Renascor Resources vs. Evolution Mining | Renascor Resources vs. Bluescope Steel | Renascor Resources vs. Sandfire Resources NL |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |