Correlation Between South Star and Ridgestone Mining
Can any of the company-specific risk be diversified away by investing in both South Star and Ridgestone Mining 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 Ridgestone Mining 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 Ridgestone Mining, you can compare the effects of market volatilities on South Star and Ridgestone Mining 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 Ridgestone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Ridgestone Mining.
Diversification Opportunities for South Star and Ridgestone Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between South and Ridgestone is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and Ridgestone Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgestone Mining 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 Ridgestone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgestone Mining has no effect on the direction of South Star i.e., South Star and Ridgestone Mining go up and down completely randomly.
Pair Corralation between South Star and Ridgestone Mining
Assuming the 90 days horizon South Star Battery is expected to under-perform the Ridgestone Mining. But the otc stock apears to be less risky and, when comparing its historical volatility, South Star Battery is 1.65 times less risky than Ridgestone Mining. The otc stock trades about -0.08 of its potential returns per unit of risk. The Ridgestone Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5.80 in Ridgestone Mining on August 29, 2024 and sell it today you would earn a total of 0.30 from holding Ridgestone Mining or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. Ridgestone Mining
Performance |
| Timeline |
| South Star Battery |
| Ridgestone Mining |
South Star and Ridgestone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Ridgestone Mining
The main advantage of trading using opposite South Star and Ridgestone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, Ridgestone Mining 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 Ridgestone Mining will offset losses from the drop in Ridgestone Mining's long position.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
| Ridgestone Mining vs. ZincX Resources Corp | Ridgestone Mining vs. Strategic Resources | Ridgestone Mining vs. Nuinsco Resources Limited | Ridgestone Mining vs. Qubec Nickel Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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