Correlation Between Red Hill and Walkabout Resources
Can any of the company-specific risk be diversified away by investing in both Red Hill and Walkabout 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 Walkabout 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 Walkabout Resources, you can compare the effects of market volatilities on Red Hill and Walkabout 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 Walkabout Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Hill and Walkabout Resources.
Diversification Opportunities for Red Hill and Walkabout Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Red and Walkabout is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Red Hill Iron and Walkabout Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walkabout 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 Walkabout Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walkabout Resources has no effect on the direction of Red Hill i.e., Red Hill and Walkabout Resources go up and down completely randomly.
Pair Corralation between Red Hill and Walkabout Resources
If you would invest 382.00 in Red Hill Iron on September 13, 2024 and sell it today you would earn a total of 38.00 from holding Red Hill Iron or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Hill Iron vs. Walkabout Resources
Performance |
| Timeline |
| Red Hill Iron |
| Walkabout Resources |
Red Hill and Walkabout Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Hill and Walkabout Resources
The main advantage of trading using opposite Red Hill and Walkabout Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Hill position performs unexpectedly, Walkabout 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 Walkabout Resources will offset losses from the drop in Walkabout Resources' long position.| Red Hill vs. Northern Star Resources | Red Hill vs. Evolution Mining | Red Hill vs. Bluescope Steel | Red Hill vs. Sandfire Resources NL |
| Walkabout Resources vs. Northern Star Resources | Walkabout Resources vs. Evolution Mining | Walkabout Resources vs. Bluescope Steel | Walkabout Resources vs. Sandfire Resources NL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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