Correlation Between Getty Copper and Rockridge Resources

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

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

Diversification Opportunities for Getty Copper and Rockridge Resources

0.29

Correlation Coefficient

Getty Copper  Rockridge Resources

Modest diversification

The 3 months correlation between Getty and Rockridge is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Getty Copper and Rockridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockridge Resources and Getty Copper 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 Getty Copper are associated (or correlated) with Rockridge Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockridge Resources has no effect on the direction of Getty Copper i.e., Getty Copper and Rockridge Resources go up and down completely randomly.

Pair Corralation between Getty Copper and Rockridge Resources

Assuming the 90 days horizon Getty Copper is expected to under-perform the Rockridge Resources. In addition to that, Getty Copper is 1.05 times more volatile than Rockridge Resources. It trades about -0.12 of its total potential returns per unit of risk. Rockridge Resources is currently generating about 0.1 per unit of volatility. If you would invest  1.02  in Rockridge Resources on December 30, 2024 and sell it today you would earn a total of  0.09  from holding Rockridge Resources or generate 8.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	29.23%
Values	Daily Returns

Getty Copper  vs.  Rockridge Resources

Getty Copper

Risk-Adjusted Performance

Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Rockridge Resources

Risk-Adjusted Performance

OK

Over the last 90 days Rockridge Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile essential indicators, Rockridge Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Getty Copper and Rockridge Resources

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

The idea behind Getty Copper and Rockridge 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.