Correlation Between Stans Energy and Ridgestone Mining
Can any of the company-specific risk be diversified away by investing in both Stans Energy and Ridgestone 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 Stans Energy and Ridgestone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stans Energy Corp and Ridgestone Mining, you can compare the effects of market volatilities on Stans Energy and Ridgestone 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 Stans Energy with a short position of Ridgestone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stans Energy and Ridgestone Mining.
Diversification Opportunities for Stans Energy and Ridgestone Mining
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stans and Ridgestone is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Stans Energy Corp and Ridgestone Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgestone Mining and Stans Energy 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 Stans Energy Corp are associated (or correlated) with Ridgestone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgestone Mining has no effect on the direction of Stans Energy i.e., Stans Energy and Ridgestone Mining go up and down completely randomly.
Pair Corralation between Stans Energy and Ridgestone Mining
Assuming the 90 days horizon Stans Energy Corp is expected to under-perform the Ridgestone Mining. In addition to that, Stans Energy is 1.19 times more volatile than Ridgestone Mining. It trades about -0.24 of its total potential returns per unit of risk. Ridgestone Mining is currently generating about 0.14 per unit of volatility. If you would invest 3.90 in Ridgestone Mining on October 26, 2024 and sell it today you would earn a total of 0.96 from holding Ridgestone Mining or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Stans Energy Corp vs. Ridgestone Mining
Performance |
| Timeline |
| Stans Energy Corp |
| Ridgestone Mining |
Stans Energy and Ridgestone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stans Energy and Ridgestone Mining
The main advantage of trading using opposite Stans Energy and Ridgestone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stans Energy position performs unexpectedly, Ridgestone 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 Ridgestone Mining will offset losses from the drop in Ridgestone Mining's long position.| Stans Energy vs. Ridgestone Mining | Stans Energy vs. Lion Copper and | Stans Energy vs. FPX Nickel Corp | Stans Energy vs. Focus Graphite |
| Ridgestone Mining vs. ZincX Resources Corp | Ridgestone Mining vs. Strategic Resources | Ridgestone Mining vs. Nuinsco Resources Limited | Ridgestone Mining vs. Qubec Nickel Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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