Correlation Between Rockfire Resources and Jersey Electricity
Can any of the company-specific risk be diversified away by investing in both Rockfire Resources and Jersey Electricity 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 Rockfire Resources and Jersey Electricity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockfire Resources plc and Jersey Electricity plc, you can compare the effects of market volatilities on Rockfire Resources and Jersey Electricity 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 Rockfire Resources with a short position of Jersey Electricity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockfire Resources and Jersey Electricity.
Diversification Opportunities for Rockfire Resources and Jersey Electricity
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rockfire and Jersey is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Rockfire Resources plc and Jersey Electricity plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jersey Electricity plc and Rockfire 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 Rockfire Resources plc are associated (or correlated) with Jersey Electricity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jersey Electricity plc has no effect on the direction of Rockfire Resources i.e., Rockfire Resources and Jersey Electricity go up and down completely randomly.
Pair Corralation between Rockfire Resources and Jersey Electricity
Assuming the 90 days trading horizon Rockfire Resources plc is expected to under-perform the Jersey Electricity. In addition to that, Rockfire Resources is 3.47 times more volatile than Jersey Electricity plc. It trades about -0.17 of its total potential returns per unit of risk. Jersey Electricity plc is currently generating about 0.09 per unit of volatility. If you would invest 42,300 in Jersey Electricity plc on November 28, 2024 and sell it today you would earn a total of 1,200 from holding Jersey Electricity plc or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockfire Resources plc vs. Jersey Electricity plc
Performance |
| Timeline |
| Rockfire Resources plc |
| Jersey Electricity plc |
Rockfire Resources and Jersey Electricity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockfire Resources and Jersey Electricity
The main advantage of trading using opposite Rockfire Resources and Jersey Electricity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockfire Resources position performs unexpectedly, Jersey Electricity 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 Jersey Electricity will offset losses from the drop in Jersey Electricity's long position.| Rockfire Resources vs. Aeorema Communications Plc | Rockfire Resources vs. Gamma Communications PLC | Rockfire Resources vs. Telecom Italia SpA | Rockfire Resources vs. Ebro Foods |
| Jersey Electricity vs. PureTech Health plc | Jersey Electricity vs. Abingdon Health Plc | Jersey Electricity vs. HCA Healthcare | Jersey Electricity vs. Target Healthcare REIT |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |