Correlation Between Financial and Maritime Resources
Can any of the company-specific risk be diversified away by investing in both Financial and Maritime 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 Financial and Maritime Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Maritime Resources Corp, you can compare the effects of market volatilities on Financial and Maritime 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 Financial with a short position of Maritime Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Maritime Resources.
Diversification Opportunities for Financial and Maritime Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financial and Maritime is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Maritime Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maritime Resources Corp and 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 Financial 15 Split are associated (or correlated) with Maritime Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maritime Resources Corp has no effect on the direction of Financial i.e., Financial and Maritime Resources go up and down completely randomly.
Pair Corralation between Financial and Maritime Resources
Assuming the 90 days trading horizon Financial is expected to generate 13.43 times less return on investment than Maritime Resources. But when comparing it to its historical volatility, Financial 15 Split is 23.18 times less risky than Maritime Resources. It trades about 0.26 of its potential returns per unit of risk. Maritime Resources Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Maritime Resources Corp on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Maritime Resources Corp or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial 15 Split vs. Maritime Resources Corp
Performance |
| Timeline |
| Financial 15 Split |
| Maritime Resources Corp |
Financial and Maritime Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Maritime Resources
The main advantage of trading using opposite Financial and Maritime Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, Maritime 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 Maritime Resources will offset losses from the drop in Maritime Resources' long position.| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
| Maritime Resources vs. Kesselrun Resources | Maritime Resources vs. Tristar Gold | Maritime Resources vs. Benton Resources | Maritime Resources vs. Cartier Resources |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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