Correlation Between Flinders Resources and Namibia Critical

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

By analyzing existing cross correlation between Flinders Resources Limited and Namibia Critical Metals, you can compare the effects of market volatilities on Flinders Resources and Namibia Critical 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 Flinders Resources with a short position of Namibia Critical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Namibia Critical.

Diversification Opportunities for Flinders Resources and Namibia Critical

-0.62

Correlation Coefficient

Flinders Resources  Namibia Critical

Excellent diversification

The 3 months correlation between Flinders and Namibia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Namibia Critical Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namibia Critical Metals and Flinders 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 Flinders Resources Limited are associated (or correlated) with Namibia Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namibia Critical Metals has no effect on the direction of Flinders Resources i.e., Flinders Resources and Namibia Critical go up and down completely randomly.

Pair Corralation between Flinders Resources and Namibia Critical

If you would invest  385.00  in Flinders Resources Limited on October 6, 2024 and sell it today you would earn a total of  156.00  from holding Flinders Resources Limited or generate 40.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Flinders Resources Limited  vs.  Namibia Critical Metals

Flinders Resources

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Flinders Resources Limited are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Flinders Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Namibia Critical Metals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Namibia Critical Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Namibia Critical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flinders Resources and Namibia Critical

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

The idea behind Flinders Resources Limited and Namibia Critical Metals 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.