Correlation Between Ritchie Bros and Midnight Sun
Can any of the company-specific risk be diversified away by investing in both Ritchie Bros and Midnight Sun 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 Ritchie Bros and Midnight Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ritchie Bros Auctioneers and Midnight Sun Mining, you can compare the effects of market volatilities on Ritchie Bros and Midnight Sun 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 Ritchie Bros with a short position of Midnight Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ritchie Bros and Midnight Sun.
Diversification Opportunities for Ritchie Bros and Midnight Sun
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ritchie and Midnight is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers and Midnight Sun Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midnight Sun Mining and Ritchie Bros 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 Ritchie Bros Auctioneers are associated (or correlated) with Midnight Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midnight Sun Mining has no effect on the direction of Ritchie Bros i.e., Ritchie Bros and Midnight Sun go up and down completely randomly.
Pair Corralation between Ritchie Bros and Midnight Sun
Assuming the 90 days trading horizon Ritchie Bros is expected to generate 2.24 times less return on investment than Midnight Sun. But when comparing it to its historical volatility, Ritchie Bros Auctioneers is 4.19 times less risky than Midnight Sun. It trades about 0.11 of its potential returns per unit of risk. Midnight Sun Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Midnight Sun Mining on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Midnight Sun Mining or generate 95.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ritchie Bros Auctioneers vs. Midnight Sun Mining
Performance |
| Timeline |
| Ritchie Bros Auctioneers |
| Midnight Sun Mining |
Ritchie Bros and Midnight Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ritchie Bros and Midnight Sun
The main advantage of trading using opposite Ritchie Bros and Midnight Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ritchie Bros position performs unexpectedly, Midnight Sun 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 Midnight Sun will offset losses from the drop in Midnight Sun's long position.| Ritchie Bros vs. Toromont Industries | Ritchie Bros vs. Stantec | Ritchie Bros vs. Finning International | Ritchie Bros vs. FirstService Corp |
| Midnight Sun vs. New Destiny Mining | Midnight Sun vs. Magnum Goldcorp | Midnight Sun vs. Asiabasemetals | Midnight Sun vs. Lupaka Gold Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |