Correlation Between Red Hill and Energy Resources
Can any of the company-specific risk be diversified away by investing in both Red Hill and Energy 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 Red Hill and Energy Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Hill Iron and Energy Resources, you can compare the effects of market volatilities on Red Hill and Energy 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 Red Hill with a short position of Energy Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Hill and Energy Resources.
Diversification Opportunities for Red Hill and Energy Resources
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Red and Energy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Red Hill Iron and Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Resources and Red Hill 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 Hill Iron are associated (or correlated) with Energy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Resources has no effect on the direction of Red Hill i.e., Red Hill and Energy Resources go up and down completely randomly.
Pair Corralation between Red Hill and Energy Resources
Assuming the 90 days trading horizon Red Hill Iron is expected to generate 0.19 times more return on investment than Energy Resources. However, Red Hill Iron is 5.2 times less risky than Energy Resources. It trades about -0.36 of its potential returns per unit of risk. Energy Resources is currently generating about -0.13 per unit of risk. If you would invest 406.00 in Red Hill Iron on November 27, 2024 and sell it today you would lose (56.00) from holding Red Hill Iron or give up 13.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Hill Iron vs. Energy Resources
Performance |
| Timeline |
| Red Hill Iron |
| Energy Resources |
Red Hill and Energy Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Hill and Energy Resources
The main advantage of trading using opposite Red Hill and Energy Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Hill position performs unexpectedly, Energy 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 Energy Resources will offset losses from the drop in Energy Resources' long position.| Red Hill vs. Saferoads Holdings | Red Hill vs. Galena Mining | Red Hill vs. Gateway Mining | Red Hill vs. Globe Metals Mining |
| Energy Resources vs. MetalsGrove Mining | Energy Resources vs. Arc Funds | Energy Resources vs. Centrex Metals | Energy Resources vs. 29Metals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |