Correlation Between Iluka Resources and A-Cap Energy
Can any of the company-specific risk be diversified away by investing in both Iluka Resources and A-Cap Energy 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 Iluka Resources and A-Cap Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iluka Resources Limited and A Cap Energy Limited, you can compare the effects of market volatilities on Iluka Resources and A-Cap Energy 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 Iluka Resources with a short position of A-Cap Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iluka Resources and A-Cap Energy.
Diversification Opportunities for Iluka Resources and A-Cap Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iluka and A-Cap is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Iluka Resources Limited and A Cap Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Cap Energy and Iluka 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 Iluka Resources Limited are associated (or correlated) with A-Cap Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Cap Energy has no effect on the direction of Iluka Resources i.e., Iluka Resources and A-Cap Energy go up and down completely randomly.
Pair Corralation between Iluka Resources and A-Cap Energy
If you would invest 2.60 in A Cap Energy Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding A Cap Energy Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iluka Resources Limited vs. A Cap Energy Limited
Performance |
| Timeline |
| Iluka Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| A Cap Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Iluka Resources and A-Cap Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iluka Resources and A-Cap Energy
The main advantage of trading using opposite Iluka Resources and A-Cap Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iluka Resources position performs unexpectedly, A-Cap Energy 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 A-Cap Energy will offset losses from the drop in A-Cap Energy's long position.| Iluka Resources vs. Iluka Resources Ltd | Iluka Resources vs. China Rare Earth | Iluka Resources vs. Greenland Minerals And | Iluka Resources vs. Mkango Resources |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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