Correlation Between Rockridge Resources and First American
Can any of the company-specific risk be diversified away by investing in both Rockridge Resources and First American 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 First American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockridge Resources and First American Silver, you can compare the effects of market volatilities on Rockridge Resources and First American 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 First American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockridge Resources and First American.
Diversification Opportunities for Rockridge Resources and First American
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rockridge and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rockridge Resources and First American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Silver 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 First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Silver has no effect on the direction of Rockridge Resources i.e., Rockridge Resources and First American go up and down completely randomly.
Pair Corralation between Rockridge Resources and First American
Assuming the 90 days horizon Rockridge Resources is expected to generate 2.59 times less return on investment than First American. But when comparing it to its historical volatility, Rockridge Resources is 3.72 times less risky than First American. It trades about 0.05 of its potential returns per unit of risk. First American Silver is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.30 in First American Silver on November 27, 2024 and sell it today you would lose (0.29) from holding First American Silver or give up 96.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.59% |
| Values | Daily Returns |
Rockridge Resources vs. First American Silver
Performance |
| Timeline |
| Rockridge Resources |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| First American Silver |
Rockridge Resources and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockridge Resources and First American
The main advantage of trading using opposite Rockridge Resources and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockridge Resources position performs unexpectedly, First American 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 First American will offset losses from the drop in First American's long position.| Rockridge Resources vs. Aurwest Resources | Rockridge Resources vs. Sassy Resources | Rockridge Resources vs. Pan Global Resources | Rockridge Resources vs. Metals X Limited |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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