Correlation Between South Star and Aclara Resources
Can any of the company-specific risk be diversified away by investing in both South Star and Aclara Resources 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 South Star and Aclara Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and Aclara Resources, you can compare the effects of market volatilities on South Star and Aclara Resources 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 South Star with a short position of Aclara Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Aclara Resources.
Diversification Opportunities for South Star and Aclara Resources
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between South and Aclara is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and Aclara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclara Resources and South Star 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 South Star Battery are associated (or correlated) with Aclara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclara Resources has no effect on the direction of South Star i.e., South Star and Aclara Resources go up and down completely randomly.
Pair Corralation between South Star and Aclara Resources
Assuming the 90 days horizon South Star is expected to generate 1.14 times less return on investment than Aclara Resources. In addition to that, South Star is 1.12 times more volatile than Aclara Resources. It trades about 0.03 of its total potential returns per unit of risk. Aclara Resources is currently generating about 0.04 per unit of volatility. If you would invest 21.00 in Aclara Resources on August 26, 2024 and sell it today you would earn a total of 9.00 from holding Aclara Resources or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.15% |
| Values | Daily Returns |
South Star Battery vs. Aclara Resources
Performance |
| Timeline |
| South Star Battery |
| Aclara Resources |
South Star and Aclara Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Aclara Resources
The main advantage of trading using opposite South Star and Aclara Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, Aclara Resources 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 Aclara Resources will offset losses from the drop in Aclara Resources' long position.| South Star vs. Norra Metals Corp | South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Mundoro Capital |
| Aclara Resources vs. Norra Metals Corp | Aclara Resources vs. ZincX Resources Corp | Aclara Resources vs. Nuinsco Resources Limited | Aclara Resources vs. South Star Battery |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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