Correlation Between New Energy and Aldebaran Resources
Can any of the company-specific risk be diversified away by investing in both New Energy 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 New Energy and Aldebaran Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Energy Metals and Aldebaran Resources, you can compare the effects of market volatilities on New Energy 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 New Energy with a short position of Aldebaran Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Energy and Aldebaran Resources.
Diversification Opportunities for New Energy and Aldebaran Resources
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Aldebaran is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding New Energy Metals and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources and New Energy 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 New Energy Metals 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 New Energy i.e., New Energy and Aldebaran Resources go up and down completely randomly.
Pair Corralation between New Energy and Aldebaran Resources
If you would invest 95.00 in Aldebaran Resources on August 29, 2024 and sell it today you would earn a total of 65.00 from holding Aldebaran Resources or generate 68.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Energy Metals vs. Aldebaran Resources
Performance |
| Timeline |
| New Energy Metals |
| Aldebaran Resources |
New Energy and Aldebaran Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Energy and Aldebaran Resources
The main advantage of trading using opposite New Energy and Aldebaran Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Energy 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.| New Energy vs. Legacy Education | New Energy vs. Apple Inc | New Energy vs. NVIDIA | New Energy vs. Microsoft |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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