Correlation Between Rockridge Resources and Focus Graphite
Can any of the company-specific risk be diversified away by investing in both Rockridge Resources and Focus Graphite 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 Focus Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockridge Resources and Focus Graphite, you can compare the effects of market volatilities on Rockridge Resources and Focus Graphite 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 Focus Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockridge Resources and Focus Graphite.
Diversification Opportunities for Rockridge Resources and Focus Graphite
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rockridge and Focus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Rockridge Resources and Focus Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Graphite 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 Focus Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Graphite has no effect on the direction of Rockridge Resources i.e., Rockridge Resources and Focus Graphite go up and down completely randomly.
Pair Corralation between Rockridge Resources and Focus Graphite
Assuming the 90 days horizon Rockridge Resources is expected to generate 1.48 times less return on investment than Focus Graphite. But when comparing it to its historical volatility, Rockridge Resources is 1.27 times less risky than Focus Graphite. It trades about 0.1 of its potential returns per unit of risk. Focus Graphite is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Focus Graphite on November 30, 2024 and sell it today you would earn a total of 1.49 from holding Focus Graphite or generate 29.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 46.34% |
| Values | Daily Returns |
Rockridge Resources vs. Focus Graphite
Performance |
| Timeline |
| Rockridge Resources |
Risk-Adjusted Performance
Modest
Weak | Strong |
| Focus Graphite |
Rockridge Resources and Focus Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockridge Resources and Focus Graphite
The main advantage of trading using opposite Rockridge Resources and Focus Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockridge Resources position performs unexpectedly, Focus Graphite 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 Focus Graphite will offset losses from the drop in Focus Graphite'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 |
| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Syrah Resources Limited | Focus Graphite vs. Altura Mining Limited | Focus Graphite vs. Vulcan Minerals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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