Correlation Between Resource Base and C29 Metals
Can any of the company-specific risk be diversified away by investing in both Resource Base and C29 Metals 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 Resource Base and C29 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Base and C29 Metals, you can compare the effects of market volatilities on Resource Base and C29 Metals 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 Resource Base with a short position of C29 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Base and C29 Metals.
Diversification Opportunities for Resource Base and C29 Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Resource and C29 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Resource Base and C29 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C29 Metals and Resource Base 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 Resource Base are associated (or correlated) with C29 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C29 Metals has no effect on the direction of Resource Base i.e., Resource Base and C29 Metals go up and down completely randomly.
Pair Corralation between Resource Base and C29 Metals
Assuming the 90 days trading horizon Resource Base is expected to generate 0.36 times more return on investment than C29 Metals. However, Resource Base is 2.77 times less risky than C29 Metals. It trades about -0.03 of its potential returns per unit of risk. C29 Metals is currently generating about -0.23 per unit of risk. If you would invest 15.00 in Resource Base on November 9, 2024 and sell it today you would lose (12.00) from holding Resource Base or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 6.63% |
| Values | Daily Returns |
Resource Base vs. C29 Metals
Performance |
| Timeline |
| Resource Base |
| C29 Metals |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Resource Base and C29 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Base and C29 Metals
The main advantage of trading using opposite Resource Base and C29 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Base position performs unexpectedly, C29 Metals 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 C29 Metals will offset losses from the drop in C29 Metals' long position.| Resource Base vs. Skycity Entertainment Group | Resource Base vs. AiMedia Technologies | Resource Base vs. Mayfield Childcare | Resource Base vs. Sports Entertainment Group |
| C29 Metals vs. Sports Entertainment Group | C29 Metals vs. Epsilon Healthcare | C29 Metals vs. Sonic Healthcare | C29 Metals vs. Clime Investment Management |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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