Correlation Between US Financial and Rathdowney Resources
Can any of the company-specific risk be diversified away by investing in both US Financial and Rathdowney 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 US Financial and Rathdowney Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Financial 15 and Rathdowney Resources, you can compare the effects of market volatilities on US Financial and Rathdowney 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 US Financial with a short position of Rathdowney Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Financial and Rathdowney Resources.
Diversification Opportunities for US Financial and Rathdowney Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTU-PB and Rathdowney is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding US Financial 15 and Rathdowney Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rathdowney Resources and US 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 US Financial 15 are associated (or correlated) with Rathdowney Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rathdowney Resources has no effect on the direction of US Financial i.e., US Financial and Rathdowney Resources go up and down completely randomly.
Pair Corralation between US Financial and Rathdowney Resources
Assuming the 90 days trading horizon US Financial 15 is expected to under-perform the Rathdowney Resources. But the preferred stock apears to be less risky and, when comparing its historical volatility, US Financial 15 is 8.06 times less risky than Rathdowney Resources. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Rathdowney Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Rathdowney Resources on December 1, 2024 and sell it today you would lose (0.50) from holding Rathdowney Resources or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Financial 15 vs. Rathdowney Resources
Performance |
| Timeline |
| US Financial 15 |
| Rathdowney Resources |
US Financial and Rathdowney Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Financial and Rathdowney Resources
The main advantage of trading using opposite US Financial and Rathdowney Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Financial position performs unexpectedly, Rathdowney 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 Rathdowney Resources will offset losses from the drop in Rathdowney Resources' long position.| US Financial vs. North American Financial | US Financial vs. Prime Dividend Corp | US Financial vs. Canadian Life Companies | US Financial vs. Financial 15 Split |
| Rathdowney Resources vs. Highwood Asset Management | Rathdowney Resources vs. Altair Resources | Rathdowney Resources vs. Brookfield Asset Management | Rathdowney Resources vs. Data Communications Management |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |