Correlation Between South Star and Eros Resources
Can any of the company-specific risk be diversified away by investing in both South Star and Eros 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 Eros 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 Eros Resources Corp, you can compare the effects of market volatilities on South Star and Eros 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 Eros Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Eros Resources.
Diversification Opportunities for South Star and Eros Resources
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between South and Eros is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and Eros Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eros Resources Corp 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 Eros Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eros Resources Corp has no effect on the direction of South Star i.e., South Star and Eros Resources go up and down completely randomly.
Pair Corralation between South Star and Eros Resources
Assuming the 90 days horizon South Star Battery is expected to under-perform the Eros Resources. In addition to that, South Star is 1.11 times more volatile than Eros Resources Corp. It trades about -0.06 of its total potential returns per unit of risk. Eros Resources Corp is currently generating about 0.16 per unit of volatility. If you would invest 3.40 in Eros Resources Corp on November 9, 2024 and sell it today you would earn a total of 0.80 from holding Eros Resources Corp or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
South Star Battery vs. Eros Resources Corp
Performance |
| Timeline |
| South Star Battery |
| Eros Resources Corp |
South Star and Eros Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Eros Resources
The main advantage of trading using opposite South Star and Eros Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, Eros 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 Eros Resources will offset losses from the drop in Eros Resources' long position.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Strategic Resources |
| Eros Resources vs. Strategic Resources | Eros Resources vs. ZincX Resources Corp | Eros Resources vs. Nuinsco Resources Limited | Eros Resources vs. Tower Resources |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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