Correlation Between Core Assets and Bushveld Minerals

Can any of the company-specific risk be diversified away by investing in both Core Assets and Bushveld Minerals 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 Core Assets and Bushveld Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Core Assets Corp and Bushveld Minerals Limited, you can compare the effects of market volatilities on Core Assets and Bushveld Minerals 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 Core Assets with a short position of Bushveld Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Assets and Bushveld Minerals.

Diversification Opportunities for Core Assets and Bushveld Minerals

0.67

Correlation Coefficient

Core Assets  Bushveld Minerals

Poor diversification

The 3 months correlation between Core and Bushveld is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Core Assets Corp and Bushveld Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bushveld Minerals and Core Assets 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 Core Assets Corp are associated (or correlated) with Bushveld Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bushveld Minerals has no effect on the direction of Core Assets i.e., Core Assets and Bushveld Minerals go up and down completely randomly.

Pair Corralation between Core Assets and Bushveld Minerals

If you would invest  2.43  in Core Assets Corp on December 29, 2024 and sell it today you would earn a total of  0.24  from holding Core Assets Corp or generate 9.88% return on investment over 90 days.

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

Core Assets Corp  vs.  Bushveld Minerals Limited

Core Assets Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Core Assets Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Core Assets reported solid returns over the last few months and may actually be approaching a breakup point.

Bushveld Minerals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bushveld Minerals Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bushveld Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Core Assets and Bushveld Minerals

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

The idea behind Core Assets Corp and Bushveld Minerals Limited 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.