Correlation Between Baselode Energy and Laramide Resources

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

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

Diversification Opportunities for Baselode Energy and Laramide Resources

0.26

Correlation Coefficient

Baselode Energy  Laramide Resources

Modest diversification

The 3 months correlation between Baselode and Laramide is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baselode Energy Corp and Laramide Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laramide Resources and Baselode Energy 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 Baselode Energy Corp are associated (or correlated) with Laramide Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laramide Resources has no effect on the direction of Baselode Energy i.e., Baselode Energy and Laramide Resources go up and down completely randomly.

Pair Corralation between Baselode Energy and Laramide Resources

Assuming the 90 days trading horizon Baselode Energy Corp is expected to under-perform the Laramide Resources. In addition to that, Baselode Energy is 1.24 times more volatile than Laramide Resources. It trades about -0.23 of its total potential returns per unit of risk. Laramide Resources is currently generating about -0.12 per unit of volatility. If you would invest  77.00  in Laramide Resources on September 23, 2024 and sell it today you would lose (9.00) from holding Laramide Resources or give up 11.69% of portfolio value over 90 days.

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

Baselode Energy Corp  vs.  Laramide Resources

Baselode Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baselode Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Laramide Resources

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Baselode Energy and Laramide Resources

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

The idea behind Baselode Energy Corp and Laramide 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.