Correlation Between Kelt Exploration and ROK Resources
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and ROK 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 Kelt Exploration and ROK Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelt Exploration and ROK Resources, you can compare the effects of market volatilities on Kelt Exploration and ROK 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 Kelt Exploration with a short position of ROK Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and ROK Resources.
Diversification Opportunities for Kelt Exploration and ROK Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kelt and ROK is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and ROK Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROK Resources and Kelt Exploration 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 Kelt Exploration are associated (or correlated) with ROK Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROK Resources has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and ROK Resources go up and down completely randomly.
Pair Corralation between Kelt Exploration and ROK Resources
Assuming the 90 days horizon Kelt Exploration is expected to generate 0.47 times more return on investment than ROK Resources. However, Kelt Exploration is 2.13 times less risky than ROK Resources. It trades about -0.02 of its potential returns per unit of risk. ROK Resources is currently generating about -0.16 per unit of risk. If you would invest 490.00 in Kelt Exploration on November 3, 2024 and sell it today you would lose (5.00) from holding Kelt Exploration or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kelt Exploration vs. ROK Resources
Performance |
| Timeline |
| Kelt Exploration |
| ROK Resources |
Kelt Exploration and ROK Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and ROK Resources
The main advantage of trading using opposite Kelt Exploration and ROK Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, ROK 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 ROK Resources will offset losses from the drop in ROK Resources' long position.| Kelt Exploration vs. ROK Resources | Kelt Exploration vs. PetroShale | Kelt Exploration vs. Pieridae Energy Limited | Kelt Exploration vs. Bengal Energy |
| ROK Resources vs. Legacy Education | ROK Resources vs. Apple Inc | ROK Resources vs. Microsoft | ROK Resources vs. NVIDIA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |