Correlation Between KWG Resources and Aldebaran Resources
Can any of the company-specific risk be diversified away by investing in both KWG Resources and Aldebaran 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 KWG Resources and Aldebaran Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KWG Resources and Aldebaran Resources, you can compare the effects of market volatilities on KWG Resources and Aldebaran 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 KWG Resources with a short position of Aldebaran Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of KWG Resources and Aldebaran Resources.
Diversification Opportunities for KWG Resources and Aldebaran Resources
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KWG and Aldebaran is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KWG Resources and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources and KWG 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 KWG Resources are associated (or correlated) with Aldebaran Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldebaran Resources has no effect on the direction of KWG Resources i.e., KWG Resources and Aldebaran Resources go up and down completely randomly.
Pair Corralation between KWG Resources and Aldebaran Resources
Assuming the 90 days horizon KWG Resources is expected to under-perform the Aldebaran Resources. In addition to that, KWG Resources is 1.34 times more volatile than Aldebaran Resources. It trades about -0.03 of its total potential returns per unit of risk. Aldebaran Resources is currently generating about 0.26 per unit of volatility. If you would invest 104.00 in Aldebaran Resources on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Aldebaran Resources or generate 39.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
KWG Resources vs. Aldebaran Resources
Performance |
| Timeline |
| KWG Resources |
| Aldebaran Resources |
KWG Resources and Aldebaran Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KWG Resources and Aldebaran Resources
The main advantage of trading using opposite KWG Resources and Aldebaran Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWG Resources position performs unexpectedly, Aldebaran 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 Aldebaran Resources will offset losses from the drop in Aldebaran Resources' long position.| KWG Resources vs. Metals X Limited | KWG Resources vs. Largo Resources | KWG Resources vs. Sigma Lithium Resources | KWG Resources vs. Horizon Minerals Corp |
| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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