Correlation Between Mechanics Bank and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Mechanics Bank and Ascot 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 Mechanics Bank and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechanics Bank and Ascot Resources, you can compare the effects of market volatilities on Mechanics Bank and Ascot 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 Mechanics Bank with a short position of Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Bank and Ascot Resources.
Diversification Opportunities for Mechanics Bank and Ascot Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mechanics and Ascot is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Bank and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Mechanics Bank 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 Mechanics Bank are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Mechanics Bank i.e., Mechanics Bank and Ascot Resources go up and down completely randomly.
Pair Corralation between Mechanics Bank and Ascot Resources
If you would invest 18.00 in Ascot Resources on August 30, 2024 and sell it today you would lose (1.00) from holding Ascot Resources or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Mechanics Bank vs. Ascot Resources
Performance |
| Timeline |
| Mechanics Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ascot Resources |
Mechanics Bank and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechanics Bank and Ascot Resources
The main advantage of trading using opposite Mechanics Bank and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Bank position performs unexpectedly, Ascot 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Mechanics Bank vs. Merchants Marine Bancorp | Mechanics Bank vs. MNB Holdings Corp | Mechanics Bank vs. Oconee Financial | Mechanics Bank vs. Harbor Bankshares |
| Ascot Resources vs. Aurelia Metals Limited | Ascot Resources vs. Artemis Resources | Ascot Resources vs. Ascendant Resources | Ascot Resources vs. Benton Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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