Correlation Between Ridgestone Mining and Stans Energy
Can any of the company-specific risk be diversified away by investing in both Ridgestone Mining and Stans Energy 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 Ridgestone Mining and Stans Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ridgestone Mining and Stans Energy Corp, you can compare the effects of market volatilities on Ridgestone Mining and Stans Energy 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 Ridgestone Mining with a short position of Stans Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ridgestone Mining and Stans Energy.
Diversification Opportunities for Ridgestone Mining and Stans Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ridgestone and Stans is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ridgestone Mining and Stans Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stans Energy Corp and Ridgestone Mining 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 Ridgestone Mining are associated (or correlated) with Stans Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stans Energy Corp has no effect on the direction of Ridgestone Mining i.e., Ridgestone Mining and Stans Energy go up and down completely randomly.
Pair Corralation between Ridgestone Mining and Stans Energy
Assuming the 90 days horizon Ridgestone Mining is expected to generate 0.84 times more return on investment than Stans Energy. However, Ridgestone Mining is 1.19 times less risky than Stans Energy. It trades about 0.14 of its potential returns per unit of risk. Stans Energy Corp is currently generating about -0.24 per unit of risk. If you would invest 3.90 in Ridgestone Mining on October 26, 2024 and sell it today you would earn a total of 0.96 from holding Ridgestone Mining or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Ridgestone Mining vs. Stans Energy Corp
Performance |
| Timeline |
| Ridgestone Mining |
| Stans Energy Corp |
Ridgestone Mining and Stans Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ridgestone Mining and Stans Energy
The main advantage of trading using opposite Ridgestone Mining and Stans Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ridgestone Mining position performs unexpectedly, Stans Energy 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 Stans Energy will offset losses from the drop in Stans Energy's long position.| Ridgestone Mining vs. ZincX Resources Corp | Ridgestone Mining vs. Strategic Resources | Ridgestone Mining vs. Nuinsco Resources Limited | Ridgestone Mining vs. Qubec Nickel Corp |
| Stans Energy vs. Ridgestone Mining | Stans Energy vs. Lion Copper and | Stans Energy vs. FPX Nickel Corp | Stans Energy vs. Focus Graphite |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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