Correlation Between Whitehaven Coal and Morien Resources
Can any of the company-specific risk be diversified away by investing in both Whitehaven Coal and Morien 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 Whitehaven Coal and Morien Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitehaven Coal Limited and Morien Resources Corp, you can compare the effects of market volatilities on Whitehaven Coal and Morien 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 Whitehaven Coal with a short position of Morien Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitehaven Coal and Morien Resources.
Diversification Opportunities for Whitehaven Coal and Morien Resources
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Whitehaven and Morien is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Whitehaven Coal Limited and Morien Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morien Resources Corp and Whitehaven Coal 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 Whitehaven Coal Limited are associated (or correlated) with Morien Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morien Resources Corp has no effect on the direction of Whitehaven Coal i.e., Whitehaven Coal and Morien Resources go up and down completely randomly.
Pair Corralation between Whitehaven Coal and Morien Resources
Assuming the 90 days horizon Whitehaven Coal Limited is expected to under-perform the Morien Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Whitehaven Coal Limited is 2.94 times less risky than Morien Resources. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Morien Resources Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Morien Resources Corp on September 12, 2024 and sell it today you would lose (1.00) from holding Morien Resources Corp or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Whitehaven Coal Limited vs. Morien Resources Corp
Performance |
| Timeline |
| Whitehaven Coal |
| Morien Resources Corp |
Whitehaven Coal and Morien Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitehaven Coal and Morien Resources
The main advantage of trading using opposite Whitehaven Coal and Morien Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitehaven Coal position performs unexpectedly, Morien 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 Morien Resources will offset losses from the drop in Morien Resources' long position.| Whitehaven Coal vs. New Hope | Whitehaven Coal vs. Adaro Energy Tbk | Whitehaven Coal vs. Thungela Resources Limited | Whitehaven Coal vs. Yancoal Australia |
| Morien Resources vs. Adaro Energy Tbk | Morien Resources vs. Alliance Resource Partners | Morien Resources vs. Recursion Pharmaceuticals | Morien Resources vs. PayPal Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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