Correlation Between Balkan Mining and Rural Funds

Can any of the company-specific risk be diversified away by investing in both Balkan Mining and Rural Funds 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 Balkan Mining and Rural Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Balkan Mining and Rural Funds

0.41

Correlation Coefficient

Balkan Mining  Rural Funds

Very weak diversification

The 3 months correlation between Balkan and Rural is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Balkan Mining and and Rural Funds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rural Funds Group and Balkan Mining 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 Balkan Mining and are associated (or correlated) with Rural Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rural Funds Group has no effect on the direction of Balkan Mining i.e., Balkan Mining and Rural Funds go up and down completely randomly.

Pair Corralation between Balkan Mining and Rural Funds

Assuming the 90 days trading horizon Balkan Mining and is expected to under-perform the Rural Funds. In addition to that, Balkan Mining is 4.6 times more volatile than Rural Funds Group. It trades about -0.04 of its total potential returns per unit of risk. Rural Funds Group is currently generating about -0.05 per unit of volatility. If you would invest  244.00  in Rural Funds Group on October 25, 2024 and sell it today you would lose (81.00) from holding Rural Funds Group or give up 33.2% of portfolio value over 90 days.

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

Balkan Mining and  vs.  Rural Funds Group

Balkan Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Rural Funds Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rural Funds Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Balkan Mining and Rural Funds

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

The idea behind Balkan Mining and and Rural Funds Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.