Correlation Between Rockfire Resources and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both Rockfire Resources and Mulberry Group 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 Mulberry Group 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 Mulberry Group PLC, you can compare the effects of market volatilities on Rockfire Resources and Mulberry Group 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 Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockfire Resources and Mulberry Group.
Diversification Opportunities for Rockfire Resources and Mulberry Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rockfire and Mulberry is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Rockfire Resources plc and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group 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 Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of Rockfire Resources i.e., Rockfire Resources and Mulberry Group go up and down completely randomly.
Pair Corralation between Rockfire Resources and Mulberry Group
Assuming the 90 days trading horizon Rockfire Resources plc is expected to generate 8.64 times more return on investment than Mulberry Group. However, Rockfire Resources is 8.64 times more volatile than Mulberry Group PLC. It trades about 0.16 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about 0.13 per unit of risk. If you would invest 11.00 in Rockfire Resources plc on September 24, 2024 and sell it today you would earn a total of 5.00 from holding Rockfire Resources plc or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockfire Resources plc vs. Mulberry Group PLC
Performance |
| Timeline |
| Rockfire Resources plc |
| Mulberry Group PLC |
Rockfire Resources and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockfire Resources and Mulberry Group
The main advantage of trading using opposite Rockfire Resources and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockfire Resources position performs unexpectedly, Mulberry Group 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| Rockfire Resources vs. Givaudan SA | Rockfire Resources vs. Antofagasta PLC | Rockfire Resources vs. Ferrexpo PLC | Rockfire Resources vs. Atalaya Mining |
| Mulberry Group vs. Rightmove PLC | Mulberry Group vs. Bioventix | Mulberry Group vs. VeriSign | Mulberry Group vs. Games Workshop Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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