Correlation Between Roscan Gold and Resolute Mining
Can any of the company-specific risk be diversified away by investing in both Roscan Gold and Resolute Mining 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 Roscan Gold and Resolute Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roscan Gold Corp and Resolute Mining Limited, you can compare the effects of market volatilities on Roscan Gold and Resolute Mining 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 Roscan Gold with a short position of Resolute Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roscan Gold and Resolute Mining.
Diversification Opportunities for Roscan Gold and Resolute Mining
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roscan and Resolute is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Roscan Gold Corp and Resolute Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resolute Mining and Roscan Gold 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 Roscan Gold Corp are associated (or correlated) with Resolute Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resolute Mining has no effect on the direction of Roscan Gold i.e., Roscan Gold and Resolute Mining go up and down completely randomly.
Pair Corralation between Roscan Gold and Resolute Mining
Assuming the 90 days horizon Roscan Gold is expected to generate 3.3 times less return on investment than Resolute Mining. In addition to that, Roscan Gold is 1.33 times more volatile than Resolute Mining Limited. It trades about 0.01 of its total potential returns per unit of risk. Resolute Mining Limited is currently generating about 0.05 per unit of volatility. If you would invest 21.00 in Resolute Mining Limited on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Resolute Mining Limited or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roscan Gold Corp vs. Resolute Mining Limited
Performance |
| Timeline |
| Roscan Gold Corp |
| Resolute Mining |
Roscan Gold and Resolute Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roscan Gold and Resolute Mining
The main advantage of trading using opposite Roscan Gold and Resolute Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roscan Gold position performs unexpectedly, Resolute Mining 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 Resolute Mining will offset losses from the drop in Resolute Mining's long position.| Roscan Gold vs. Vertiv Holdings Co | Roscan Gold vs. Nasdaq Inc | Roscan Gold vs. McDonalds | Roscan Gold vs. Walmart |
| Resolute Mining vs. Aurion Resources | Resolute Mining vs. Minera Alamos | Resolute Mining vs. Rio2 Limited | Resolute Mining vs. Roscan 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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