Correlation Between Rockridge Resources and Infinite Ore
Can any of the company-specific risk be diversified away by investing in both Rockridge Resources and Infinite Ore 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 Rockridge Resources and Infinite Ore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockridge Resources and Infinite Ore Corp, you can compare the effects of market volatilities on Rockridge Resources and Infinite Ore 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 Rockridge Resources with a short position of Infinite Ore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockridge Resources and Infinite Ore.
Diversification Opportunities for Rockridge Resources and Infinite Ore
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rockridge and Infinite is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rockridge Resources and Infinite Ore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinite Ore Corp and Rockridge 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 Rockridge Resources are associated (or correlated) with Infinite Ore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinite Ore Corp has no effect on the direction of Rockridge Resources i.e., Rockridge Resources and Infinite Ore go up and down completely randomly.
Pair Corralation between Rockridge Resources and Infinite Ore
Assuming the 90 days horizon Rockridge Resources is expected to under-perform the Infinite Ore. But the pink sheet apears to be less risky and, when comparing its historical volatility, Rockridge Resources is 1.31 times less risky than Infinite Ore. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Infinite Ore Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.80 in Infinite Ore Corp on September 1, 2024 and sell it today you would lose (0.10) from holding Infinite Ore Corp or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rockridge Resources vs. Infinite Ore Corp
Performance |
| Timeline |
| Rockridge Resources |
| Infinite Ore Corp |
Rockridge Resources and Infinite Ore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockridge Resources and Infinite Ore
The main advantage of trading using opposite Rockridge Resources and Infinite Ore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockridge Resources position performs unexpectedly, Infinite Ore 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 Infinite Ore will offset losses from the drop in Infinite Ore's long position.| Rockridge Resources vs. ATT Inc | Rockridge Resources vs. Merck Company | Rockridge Resources vs. Walt Disney | Rockridge Resources vs. Caterpillar |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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