Correlation Between Iluka Resources and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Iluka Resources and Champion Bear 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 Champion Bear 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 Champion Bear Resources, you can compare the effects of market volatilities on Iluka Resources and Champion Bear 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 Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iluka Resources and Champion Bear.
Diversification Opportunities for Iluka Resources and Champion Bear
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Iluka and Champion is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Iluka Resources Limited and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources 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 Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Iluka Resources i.e., Iluka Resources and Champion Bear go up and down completely randomly.
Pair Corralation between Iluka Resources and Champion Bear
Assuming the 90 days horizon Iluka Resources Limited is expected to under-perform the Champion Bear. But the pink sheet apears to be less risky and, when comparing its historical volatility, Iluka Resources Limited is 6.67 times less risky than Champion Bear. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Champion Bear Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Champion Bear Resources on September 1, 2024 and sell it today you would lose (1.00) from holding Champion Bear Resources or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 50.79% |
| Values | Daily Returns |
Iluka Resources Limited vs. Champion Bear Resources
Performance |
| Timeline |
| Iluka Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Champion Bear Resources |
Iluka Resources and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iluka Resources and Champion Bear
The main advantage of trading using opposite Iluka Resources and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iluka Resources position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear'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 |
| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt 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 Stocks Directory module to find actively traded stocks across global markets.
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