Correlation Between Ironbark Capital and Kingsrose Mining

Can any of the company-specific risk be diversified away by investing in both Ironbark Capital and Kingsrose Mining 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 Ironbark Capital and Kingsrose Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Ironbark Capital and Kingsrose Mining

0.13

Correlation Coefficient

Ironbark Capital  Kingsrose Mining

Average diversification

The 3 months correlation between Ironbark and Kingsrose is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and Kingsrose Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsrose Mining and Ironbark Capital 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 Ironbark Capital are associated (or correlated) with Kingsrose Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsrose Mining has no effect on the direction of Ironbark Capital i.e., Ironbark Capital and Kingsrose Mining go up and down completely randomly.

Pair Corralation between Ironbark Capital and Kingsrose Mining

Assuming the 90 days trading horizon Ironbark Capital is expected to generate 23.89 times less return on investment than Kingsrose Mining. But when comparing it to its historical volatility, Ironbark Capital is 4.88 times less risky than Kingsrose Mining. It trades about 0.0 of its potential returns per unit of risk. Kingsrose Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3.60  in Kingsrose Mining on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Kingsrose Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Ironbark Capital  vs.  Kingsrose Mining

Ironbark Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ironbark Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Ironbark Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Kingsrose Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsrose Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Kingsrose Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ironbark Capital and Kingsrose Mining

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

The idea behind Ironbark Capital and Kingsrose Mining 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.