Correlation Between Karora Resources and Matador Mining
Can any of the company-specific risk be diversified away by investing in both Karora Resources and Matador 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 Karora Resources and Matador Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karora Resources and Matador Mining Limited, you can compare the effects of market volatilities on Karora Resources and Matador 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 Karora Resources with a short position of Matador Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karora Resources and Matador Mining.
Diversification Opportunities for Karora Resources and Matador Mining
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Karora and Matador is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Karora Resources and Matador Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matador Mining and Karora 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 Karora Resources are associated (or correlated) with Matador Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matador Mining has no effect on the direction of Karora Resources i.e., Karora Resources and Matador Mining go up and down completely randomly.
Pair Corralation between Karora Resources and Matador Mining
If you would invest 6.48 in Matador Mining Limited on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Matador Mining 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 |
Karora Resources vs. Matador Mining Limited
Performance |
| Timeline |
| Karora Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Matador Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Karora Resources and Matador Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karora Resources and Matador Mining
The main advantage of trading using opposite Karora Resources and Matador Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karora Resources position performs unexpectedly, Matador 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 Matador Mining will offset losses from the drop in Matador Mining's long position.| Karora Resources vs. K92 Mining | Karora Resources vs. I 80 Gold Corp | Karora Resources vs. Wesdome Gold Mines | Karora Resources vs. GGX Gold Corp |
| Matador Mining vs. Rio2 Limited | Matador Mining vs. Aurion Resources | Matador Mining vs. Norsemont Mining | Matador Mining vs. Minaurum Gold |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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