Correlation Between Matador Mining and Red Pine
Can any of the company-specific risk be diversified away by investing in both Matador Mining and Red Pine 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 Matador Mining and Red Pine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matador Mining Limited and Red Pine Exploration, you can compare the effects of market volatilities on Matador Mining and Red Pine 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 Matador Mining with a short position of Red Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Mining and Red Pine.
Diversification Opportunities for Matador Mining and Red Pine
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matador and Red is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Matador Mining Limited and Red Pine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Pine Exploration and Matador Mining 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 Matador Mining Limited are associated (or correlated) with Red Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Pine Exploration has no effect on the direction of Matador Mining i.e., Matador Mining and Red Pine go up and down completely randomly.
Pair Corralation between Matador Mining and Red Pine
Assuming the 90 days horizon Matador Mining Limited is expected to generate 2.79 times more return on investment than Red Pine. However, Matador Mining is 2.79 times more volatile than Red Pine Exploration. It trades about 0.1 of its potential returns per unit of risk. Red Pine Exploration is currently generating about 0.01 per unit of risk. If you would invest 3.70 in Matador Mining Limited on August 29, 2024 and sell it today you would earn a total of 2.78 from holding Matador Mining Limited or generate 75.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.08% |
| Values | Daily Returns |
Matador Mining Limited vs. Red Pine Exploration
Performance |
| Timeline |
| Matador Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Red Pine Exploration |
Matador Mining and Red Pine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matador Mining and Red Pine
The main advantage of trading using opposite Matador Mining and Red Pine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Mining position performs unexpectedly, Red Pine 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 Red Pine will offset losses from the drop in Red Pine's long position.| Matador Mining vs. Rio2 Limited | Matador Mining vs. Aurion Resources | Matador Mining vs. Norsemont Mining | Matador Mining vs. Minaurum Gold |
| Red Pine vs. Silver Hammer Mining | Red Pine vs. Reyna Silver Corp | Red Pine vs. Guanajuato Silver | Red Pine vs. Silver One 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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