Correlation Between South Star and Sassy Resources
Can any of the company-specific risk be diversified away by investing in both South Star and Sassy 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 Sassy 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 Sassy Resources, you can compare the effects of market volatilities on South Star and Sassy 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 Sassy Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Sassy Resources.
Diversification Opportunities for South Star and Sassy Resources
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between South and Sassy is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and Sassy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sassy 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 Sassy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sassy Resources has no effect on the direction of South Star i.e., South Star and Sassy Resources go up and down completely randomly.
Pair Corralation between South Star and Sassy Resources
Assuming the 90 days horizon South Star Battery is expected to generate 0.7 times more return on investment than Sassy Resources. However, South Star Battery is 1.43 times less risky than Sassy Resources. It trades about -0.08 of its potential returns per unit of risk. Sassy Resources is currently generating about -0.22 per unit of risk. If you would invest 44.00 in South Star Battery on August 29, 2024 and sell it today you would lose (5.00) from holding South Star Battery or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. Sassy Resources
Performance |
| Timeline |
| South Star Battery |
| Sassy Resources |
South Star and Sassy Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Sassy Resources
The main advantage of trading using opposite South Star and Sassy Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, Sassy 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 Sassy Resources will offset losses from the drop in Sassy Resources' 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 |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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