Correlation Between Exchange Income and ROKMASTER Resources

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

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

Diversification Opportunities for Exchange Income and ROKMASTER Resources

-0.11

Correlation Coefficient

Exchange Income  ROKMASTER Resources

Good diversification

The 3 months correlation between Exchange and ROKMASTER is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income and ROKMASTER Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROKMASTER Resources Corp and Exchange Income 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 Exchange Income are associated (or correlated) with ROKMASTER Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROKMASTER Resources Corp has no effect on the direction of Exchange Income i.e., Exchange Income and ROKMASTER Resources go up and down completely randomly.

Pair Corralation between Exchange Income and ROKMASTER Resources

Assuming the 90 days trading horizon Exchange Income is expected to under-perform the ROKMASTER Resources. But the stock apears to be less risky and, when comparing its historical volatility, Exchange Income is 13.23 times less risky than ROKMASTER Resources. The stock trades about -0.19 of its potential returns per unit of risk. The ROKMASTER Resources Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2.00  in ROKMASTER Resources Corp on December 29, 2024 and sell it today you would earn a total of  0.00  from holding ROKMASTER Resources Corp or generate 0.0% return on investment over 90 days.

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

Exchange Income  vs.  ROKMASTER Resources Corp

Exchange Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exchange Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ROKMASTER Resources Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ROKMASTER Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ROKMASTER Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exchange Income and ROKMASTER Resources

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

The idea behind Exchange Income and ROKMASTER Resources Corp 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.