Correlation Between Rockhaven Resources and Galway Metals
Can any of the company-specific risk be diversified away by investing in both Rockhaven Resources and Galway Metals 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 Rockhaven Resources and Galway Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockhaven Resources and Galway Metals, you can compare the effects of market volatilities on Rockhaven Resources and Galway Metals 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 Rockhaven Resources with a short position of Galway Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockhaven Resources and Galway Metals.
Diversification Opportunities for Rockhaven Resources and Galway Metals
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rockhaven and Galway is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Rockhaven Resources and Galway Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galway Metals and Rockhaven Resources 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 Rockhaven Resources are associated (or correlated) with Galway Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galway Metals has no effect on the direction of Rockhaven Resources i.e., Rockhaven Resources and Galway Metals go up and down completely randomly.
Pair Corralation between Rockhaven Resources and Galway Metals
Given the investment horizon of 90 days Rockhaven Resources is expected to generate 1.41 times more return on investment than Galway Metals. However, Rockhaven Resources is 1.41 times more volatile than Galway Metals. It trades about 0.04 of its potential returns per unit of risk. Galway Metals is currently generating about 0.01 per unit of risk. If you would invest 7.00 in Rockhaven Resources on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Rockhaven Resources or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockhaven Resources vs. Galway Metals
Performance |
| Timeline |
| Rockhaven Resources |
| Galway Metals |
Rockhaven Resources and Galway Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockhaven Resources and Galway Metals
The main advantage of trading using opposite Rockhaven Resources and Galway Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockhaven Resources position performs unexpectedly, Galway Metals 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 Galway Metals will offset losses from the drop in Galway Metals' long position.| Rockhaven Resources vs. First Majestic Silver | Rockhaven Resources vs. Ivanhoe Energy | Rockhaven Resources vs. Orezone Gold Corp | Rockhaven Resources vs. Faraday Copper Corp |
| Galway Metals vs. First Majestic Silver | Galway Metals vs. Ivanhoe Energy | Galway Metals vs. Orezone Gold Corp | Galway Metals vs. Faraday Copper 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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