Correlation Between Rockdale Resources and Daybreak Oil

Can any of the company-specific risk be diversified away by investing in both Rockdale Resources and Daybreak Oil 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 Rockdale Resources and Daybreak Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rockdale Resources Corp and Daybreak Oil and, you can compare the effects of market volatilities on Rockdale Resources and Daybreak Oil 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 Rockdale Resources with a short position of Daybreak Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockdale Resources and Daybreak Oil.

Diversification Opportunities for Rockdale Resources and Daybreak Oil

0.0

Correlation Coefficient

Rockdale Resources  Daybreak Oil

Pay attention - limited upside

The 3 months correlation between Rockdale and Daybreak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rockdale Resources Corp and Daybreak Oil and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daybreak Oil and Rockdale 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 Rockdale Resources Corp are associated (or correlated) with Daybreak Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daybreak Oil has no effect on the direction of Rockdale Resources i.e., Rockdale Resources and Daybreak Oil go up and down completely randomly.

Pair Corralation between Rockdale Resources and Daybreak Oil

If you would invest  0.01  in Daybreak Oil and on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Daybreak Oil and or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rockdale Resources Corp  vs.  Daybreak Oil and

Rockdale Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rockdale Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Rockdale Resources is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Daybreak Oil

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Daybreak Oil and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Daybreak Oil displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rockdale Resources and Daybreak Oil

The main advantage of trading using opposite Rockdale Resources and Daybreak Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockdale Resources position performs unexpectedly, Daybreak Oil 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 Daybreak Oil will offset losses from the drop in Daybreak Oil's long position.

The idea behind Rockdale Resources Corp and Daybreak Oil and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.