Correlation Between Ramaco Resources and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Ramaco Resources and Canaf Investments 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 Ramaco Resources and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramaco Resources and Canaf Investments, you can compare the effects of market volatilities on Ramaco Resources and Canaf Investments 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 Ramaco Resources with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramaco Resources and Canaf Investments.
Diversification Opportunities for Ramaco Resources and Canaf Investments
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ramaco and Canaf is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ramaco Resources and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Ramaco 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 Ramaco Resources are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Ramaco Resources i.e., Ramaco Resources and Canaf Investments go up and down completely randomly.
Pair Corralation between Ramaco Resources and Canaf Investments
Assuming the 90 days horizon Ramaco Resources is expected to generate 1.46 times more return on investment than Canaf Investments. However, Ramaco Resources is 1.46 times more volatile than Canaf Investments. It trades about 0.01 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.3 per unit of risk. If you would invest 1,029 in Ramaco Resources on September 2, 2024 and sell it today you would lose (3.00) from holding Ramaco Resources or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramaco Resources vs. Canaf Investments
Performance |
| Timeline |
| Ramaco Resources |
| Canaf Investments |
Ramaco Resources and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramaco Resources and Canaf Investments
The main advantage of trading using opposite Ramaco Resources and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramaco Resources position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Ramaco Resources vs. Ecoloclean Industrs | Ramaco Resources vs. Nomura Holdings ADR | Ramaco Resources vs. Playtika Holding Corp | Ramaco Resources vs. Citizens Bancorp Investment |
| Canaf Investments vs. Ramaco Resources | Canaf Investments vs. Warrior Met Coal | Canaf Investments vs. Arch Resources | Canaf Investments vs. Alpha Metallurgical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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