Correlation Between Red Moon and Filo Mining
Can any of the company-specific risk be diversified away by investing in both Red Moon and Filo 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 Red Moon and Filo Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Moon Resources and Filo Mining Corp, you can compare the effects of market volatilities on Red Moon and Filo 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 Red Moon with a short position of Filo Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Moon and Filo Mining.
Diversification Opportunities for Red Moon and Filo Mining
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Red and Filo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Red Moon Resources and Filo Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filo Mining Corp and Red Moon 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 Red Moon Resources are associated (or correlated) with Filo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filo Mining Corp has no effect on the direction of Red Moon i.e., Red Moon and Filo Mining go up and down completely randomly.
Pair Corralation between Red Moon and Filo Mining
Assuming the 90 days horizon Red Moon Resources is expected to generate 3.53 times more return on investment than Filo Mining. However, Red Moon is 3.53 times more volatile than Filo Mining Corp. It trades about -0.04 of its potential returns per unit of risk. Filo Mining Corp is currently generating about -0.13 per unit of risk. If you would invest 49.00 in Red Moon Resources on October 25, 2024 and sell it today you would lose (4.00) from holding Red Moon Resources or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.08% |
| Values | Daily Returns |
Red Moon Resources vs. Filo Mining Corp
Performance |
| Timeline |
| Red Moon Resources |
| Filo Mining Corp |
Red Moon and Filo Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Moon and Filo Mining
The main advantage of trading using opposite Red Moon and Filo Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Moon position performs unexpectedly, Filo 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 Filo Mining will offset losses from the drop in Filo Mining's long position.| Red Moon vs. Aurwest Resources | Red Moon vs. Benton Resources | Red Moon vs. Pan Global Resources | Red Moon vs. Tower Resources |
| Filo Mining vs. Lotus Resources Limited | Filo Mining vs. Golden Goliath Resources | Filo Mining vs. Stria Lithium | Filo Mining vs. Monitor Ventures |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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