Correlation Between Winsome Resources and Altura Mining
Can any of the company-specific risk be diversified away by investing in both Winsome Resources and Altura 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 Winsome Resources and Altura Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winsome Resources Limited and Altura Mining Limited, you can compare the effects of market volatilities on Winsome Resources and Altura 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 Winsome Resources with a short position of Altura Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winsome Resources and Altura Mining.
Diversification Opportunities for Winsome Resources and Altura Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Winsome and Altura is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Winsome Resources Limited and Altura Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Mining Limited and Winsome Resources 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 Winsome Resources Limited are associated (or correlated) with Altura Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Mining Limited has no effect on the direction of Winsome Resources i.e., Winsome Resources and Altura Mining go up and down completely randomly.
Pair Corralation between Winsome Resources and Altura Mining
Assuming the 90 days horizon Winsome Resources Limited is expected to generate 0.3 times more return on investment than Altura Mining. However, Winsome Resources Limited is 3.33 times less risky than Altura Mining. It trades about -0.31 of its potential returns per unit of risk. Altura Mining Limited is currently generating about -0.19 per unit of risk. If you would invest 37.00 in Winsome Resources Limited on September 1, 2024 and sell it today you would lose (10.00) from holding Winsome Resources Limited or give up 27.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winsome Resources Limited vs. Altura Mining Limited
Performance |
| Timeline |
| Winsome Resources |
| Altura Mining Limited |
Winsome Resources and Altura Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winsome Resources and Altura Mining
The main advantage of trading using opposite Winsome Resources and Altura Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winsome Resources position performs unexpectedly, Altura 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 Altura Mining will offset losses from the drop in Altura Mining's long position.| Winsome Resources vs. Legacy Education | Winsome Resources vs. Apple Inc | Winsome Resources vs. NVIDIA | Winsome Resources vs. Microsoft |
| Altura Mining vs. ATT Inc | Altura Mining vs. Merck Company | Altura Mining vs. Walt Disney | Altura Mining vs. Caterpillar |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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