Correlation Between Red Pine and Kore Mining
Can any of the company-specific risk be diversified away by investing in both Red Pine and Kore Mining 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 Pine and Kore Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Pine Exploration and Kore Mining, you can compare the effects of market volatilities on Red Pine and Kore Mining 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 Pine with a short position of Kore Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Pine and Kore Mining.
Diversification Opportunities for Red Pine and Kore Mining
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Red and Kore is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Kore Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kore Mining and Red Pine 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 Pine Exploration are associated (or correlated) with Kore Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kore Mining has no effect on the direction of Red Pine i.e., Red Pine and Kore Mining go up and down completely randomly.
Pair Corralation between Red Pine and Kore Mining
Assuming the 90 days horizon Red Pine is expected to generate 5.41 times less return on investment than Kore Mining. But when comparing it to its historical volatility, Red Pine Exploration is 1.63 times less risky than Kore Mining. It trades about 0.02 of its potential returns per unit of risk. Kore Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Kore Mining on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Kore Mining or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Pine Exploration vs. Kore Mining
Performance |
| Timeline |
| Red Pine Exploration |
| Kore Mining |
Red Pine and Kore Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Pine and Kore Mining
The main advantage of trading using opposite Red Pine and Kore Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Pine position performs unexpectedly, Kore Mining 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 Kore Mining will offset losses from the drop in Kore Mining's long position.| Red Pine vs. Honey Badger Silver | Red Pine vs. Inventus Mining Corp | Red Pine vs. CANEX Metals | Red Pine vs. Ressources Minieres Radisson |
| Kore Mining vs. Algoma Steel Group | Kore Mining vs. Champion Iron | Kore Mining vs. International Zeolite Corp | Kore Mining vs. European Residential Real |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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