Correlation Between Bear Creek and Riverside Resources

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

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

Diversification Opportunities for Bear Creek and Riverside Resources

-0.73

Correlation Coefficient

Bear Creek  Riverside Resources

Pay attention - limited upside

The 3 months correlation between Bear and Riverside is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bear Creek Mining and Riverside Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverside Resources and Bear Creek 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 Bear Creek Mining are associated (or correlated) with Riverside Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverside Resources has no effect on the direction of Bear Creek i.e., Bear Creek and Riverside Resources go up and down completely randomly.

Pair Corralation between Bear Creek and Riverside Resources

Assuming the 90 days horizon Bear Creek Mining is expected to under-perform the Riverside Resources. In addition to that, Bear Creek is 1.12 times more volatile than Riverside Resources. It trades about -0.1 of its total potential returns per unit of risk. Riverside Resources is currently generating about 0.16 per unit of volatility. If you would invest  8.90  in Riverside Resources on December 29, 2024 and sell it today you would earn a total of  5.10  from holding Riverside Resources or generate 57.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bear Creek Mining  vs.  Riverside Resources

Bear Creek Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bear Creek Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Riverside Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Riverside Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Riverside Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bear Creek and Riverside Resources

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

The idea behind Bear Creek Mining and Riverside Resources 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.